The global digital economy is fast-paced and competitive—in certain areas perhaps more so than ever.
The payments industry is one such example, where evolution is rapid and constant, from both technology and policy standpoints: across the board—and the globe—significant disruption is occurring.
Little surprise then that Canada wants to modernize its payments infrastructure. To achieve this, salient organizations are collaborating to develop the Real-Time Rail.
The RTR is described by Interac as “a national payments system that will enable fast, data-rich payments—giving governments and businesses of all sizes the ability to move meaningful sums of money instantly and with certainty.”
The effort requires moves from the tech and the policy sides.
“There’s a public policy objective here to make payments faster, more seamless, more efficient,” says Kirkland Morris, Vice President of Enterprise Initiatives and External Affairs at Interac Corp.
The room for improvement is clear, Morris believes. “The tangible benefits of the speed of settlement are real,” he says, especially among larger and older enterprises, where rusty systems normalize unnecessary friction in the flow of business.
To help build the RTR, Interac is working with Payments Canada, an organization which “underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure,” including associated systems, by-laws, and standards.
“Modernization is going to strengthen Canada’s competitive position, in particular through faster payments,” says Janet Lalonde, Senior Director of Real-Time Rail at Payments Canada.
According to recent survey highlighted in “Accelerating The Time To Realized Revenue Playbook,” most large- and mid-market Canadian firms are at least somewhat interested in RTR, with more than one-third being “very” or “extremely” interested.
Lalonde says the move toward faster payments is a “global trend.”
“These improvements are … going to facilitate innovation and competition and promote a stronger Canadian economy,” she noted.
“Just 6% of Canadian firms have no interest in real-time payments,” the Mastercard report states, “underscoring how universal the demand for real-time payments is in the Canadian market.”
Morris adds that, on top of instant speed, there is also a “data richness that comes with RTR payments” which will allow larger businesses to shed lingering legacy systems like paper invoicing and cheques.
“That will allow for the real migration of businesses and corporate entities and governments into much more seamless digitization of their own payments, whether that’s in their supplier networks, or in payments that they make out to the world at large,” he noted.
The Real-Time Rail is expected to launch in 2023.