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Payment service providers and the Real-Time Rail

The Real-Time Rail is a new instant payment infrastructure that will allow payment service providers and other eligible institutions to offer instant payment services across Canada.

Through changes to the Canadian Payments Act and the introduction of the Retail Payments Activities Act, registered payment service providers are now eligible to apply for Payments Canada membership and Real-Time Rail system participation.

The Real-Time Rail offers 24/7/365 payment processing, immediate funds delivery and instant clearing and settling. Payments are fast, convenient, final and irrevocable.

Payment service providers can choose how their business will leverage the Real-Time Rail. The system is designed to accommodate multiple business models to add strategic value. Payment service providers can participate on the system to exchange, clear and settle payments on the Real-Time Rail, or develop proprietary third party payment solutions which can be offered through participants. If connecting directly, a payment service provider can also provide technical connectivity services to participants.

The RTR Participation Guide for PSPs

Download The Real-Time Rail Participation Guide for Payment Service Providers to learn more about the competitive advantage the Real-Time Rail offers. Contact us at info@payments.ca to begin the application process with a relationship manager.

Eligibility checklist

To participate on the Real-Time Rail a payment service provider must:

Learn more about the path to participation by downloading The Real-Time Rail Participation Guide for Payment Service Providers.

The pathway to RTR participation

Prerequisite

  1. Register with the Bank of Canada under the Retail Payment Activities Act (RPAA)

Membership application

  1. Submit Payments Canada membership application
  2. Review by Payments Canada
  3. Approval from Board of Directors
    Timeline: Scheduled Board meetings (typically occurring in March, May, September and December)

RTR participation

  1. Submit RTR Participant application
  2. Review by Payments Canada
  3. Conditional approval from President (subject to completion of onboarding and testing activities)
    Timeline: Two to three weeks from application submission date

Go-live readiness

  1. Onboarding activities
  2. Testing and certification in test environment
  3. Submit attestation for final approval of application
  4. Production environment testing and rollout
  5. Ready for Real-Time Rail go-live

Preparing for the Real-Time Rail

Payment service providers can start preparing now for the Real-Time Rail and hit the ground running when the system goes live. The tool below outlines a number of business decisions and readiness considerations to understand while preparing to participate on the Real-Time Rail. Use it as a self-serve tool or reach out to us at info@payments.ca to discuss.

Download The Real-Time Rail Participation Guide for Payment Service Providers to learn more about these key decisions and the options available to payment service providers.

  • Determine core business offering: Decide whether you will develop your own Real-Time Rail payment solution, offer a Real-Time Rail payment solution with a third-party provider or offer multiple Real-Time Rail payment solutions. This is determined by your business objectives and the payment products or services you will offer to your customers.
  • Choose connection method: Will you connect to the Real-Time Rail directly through the Real-Time Rail Exchange, via a third-party service provider or through multiple connections? This decision is based on your institution's technical capabilities and resources.
  • Determine settlement model: Will you settle the payments you exchange with other Real-Time Rail participants directly via a Bank of Canada settlement account or indirectly via a settlement agent? This decision is based on your institution's operational capabilities and resources.
  • Establish a project team: Assemble a dedicated team to oversee the implementation process, including project managers, application owners, network and security staff and executive sponsors.
  • Ensure system integration: Prepare to integrate the Real-Time Rail with your institution's core systems and other relevant applications. This includes ensuring your systems can use the ISO 20022 messaging standard.
  • Prepare for an always-on environment: Get ready for your institution to operate 24/7 by establishing appropriate monitoring and alerting capabilities to address any issues that may arise at any time.
  • Fraud mitigation: The Real-Time Rail’s 24/7/365 nature requires robust systems that can monitor for and mitigate fraud around the clock. Enhance your fraud detection systems to meet the demands of real-time payments.
  • Prepare for system testing: Testing ensures your systems are functioning correctly and are prepared for live transactions.
  • Get ready to obtain certification and attestation: Before going live, direct Real-Time Rail participants must complete a certification process to validate that you have successfully completed specific test cases and are operationally ready to participate.
  • Prepare customer support: Train your customer support teams to handle inquiries and issues related to instant payments.
  • Determine ongoing management requirements: Prepare to continuously monitor and manage your Real-Time Rail participation to ensure smooth operations and to adapt to any changes in the service or your business needs.

The Real-Time Rail’s strategic benefits

Enhance end-user experience

  • 24/7/365 availability: Always on for the convenience of end users, enabling immediate payments to be made any time of day, on any day of the year.
  • Immediate funds availability: Instant payment processing enables the immediate delivery of funds to end-user accounts and real-time confirmations to the payment senders and receivers.

Create new revenue streams and use cases

  • Expansion into new markets: Provides an open platform to develop innovative payment solutions and enable competitive differentiation.
  • Broad access: Enables near-ubiquitous reach to accounts across Canada, delivering immediate scale. 

Improve operational efficiency

  • Streamlined reconciliation: Uses ISO 20022, a globally-accepted message standard that provides operational efficiencies by improving data structure and interoperability. Enriched data can travel with payments, such as invoice numbers, to streamline reconciliation of the payments.
  • Payment finality and irrevocability: Certainty of payments once they are confirmed in real time. There are no chargebacks or reversals.

Mitigate fraud and manage risk

  • Real-time settlement in central bank funds: Eliminates credit risk between participants and settlement is always guaranteed.
  • Robust risk management: Observes the Bank of Canada’s risk management standards for prominent payment systems, ensuring the safety and security of the system.
  • Centralized fraud management: Central tools mitigate against real-time payment fraud in Canada providing as an additional layer of protection to participants

Download The Real-Time Rail Participation Guide for Payment Service Providers for essential information regarding the Real-Time Rail. 

The guide includes the process for becoming a system participant, as well as the key business, operational and technical requirements to support payment service providers in evaluating and preparing for potential participation on the Real-Time Rail system.

Contact info@payments.ca

For more information about the Real-Time Rail or to begin the participation process, contact info@payments.ca today.