Canada has long had a near-real-time P2P payments system, Interac e-Transfer, but the email- and cellphone-based network has low transaction limits and funds don’t necessarily move instantly between accounts. As part of its plans to modernise Canada’s payments networks, national payments infrastructure operator Payments Canada has been building a true real-time system

The Real-Time Rail (RTR) will support faster 24/7/365 payments that are irrevocable and use the ISO 20022 financial messaging standard for all transactions. The real-time clearing and settlement system comprises a real-time exchange component; third-party exchanges flowing through the clearing and settlement component; a centralized fraud solution; and comprehensive by-laws, rules and standards.

Payments Canada’s Chief Delivery Officer Jude Pinto said in a statement that the organisation will begin payments industry-facing testing in early 2026 following the system-level testing already underway.

In its November 2025 Budget, the government said the RTR is due to be launched in 2026. “Payments Canada commends the government’s support for the delivery of the Real-Time Rail in 2026, as outlined in Budget 2025,” a Payments Canada spokesperson told EPI. “As a critical piece of national infrastructure responsible for securely transferring funds essential to the Canadian economy, the RTR will be launched after successful completion of the comprehensive testing phase, which began in Q3 2025.”
According to Dina Vardouniotis, founder and CEO of Canadian consultancy Payments+Partnerships, the RTR is likely to be launched at the end of 2026 or in early 2027.

Open banking

The other major Canadian banking news is the government’s November 2025 Budget announcement that consumers will finally get to enjoy open banking in 2026.

The plan is to offer both data access enabling consumers to share banking information with fintechs as well as a transactional capability so they will be able to use a fintech to initiate payments transactions from their bank accounts.

“Canada will pair real-time payments with an open banking regime including both data access and payment initiation under the Bank of Canada’s supervision,” said Steve Boms, Executive Director of Washington, DC-based Financial Data and Technology Association (FDATA). “The government’s foresight in pairing the Real-Time Rail with open banking presents the same opportunities for Canada that have transformed financial services competition in Europe and Britain.”

The government’s Budget Implementation Act includes a ban on using interfaces such as screen-scraping to gain direct access to a customer’s data for the purpose of providing financial services. “As noted in the policy document for Canada’s Consumer Driven Banking Framework, the Department of Finance will consult with stakeholders to determine an appropriate timeline for bringing the prohibition into force, once the framework is fully operational,” a Department of Finance spokesperson said.

Payment regulations

In preparation for the RTR, the government introduced the Retail Payment Activities Act (RPAA) to regulate the fintechs which will participate in the network. The Department of Finance stated that, as of September 2025, 1,500 payment service providers (PSPs) were supervised by the Bank of Canada under the RPAA, ensuring they meet regulatory requirements to manage risks and protect end-user funds.

Interac, the existing e-Transfer network operator, has amended its rules to allow fintechs both registered under the RPAA and registered as Money Services Businesses with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to join the Interac e-Transfer platform. “We’re currently engaged in active discussions with PSPs which are following our required process to join the e-Transfer service,” an Interac spokesperson said.

Under a change in Payments Canada’s membership rules, new entities such as registered and supervised PSPs can now apply to join Payments Canada and participate directly in national payment systems including the forthcoming RTR. Previously, only banks, trust and loan companies, credit union centrals, life insurers, federations of caisses populaires (Quebec-based cooperative member-owned FIs), and other deposit-taking institutions were eligible to belong to Payments Canada.

The significance of this change is that it will enable fintechs to access payment rails facilitating money transfers without having to go through banks. This is a key step toward levelling the playing field for non-banks to compete with incumbent FIs.

“To participate in our payment systems, organisations must be Payments Canada members and meet a distinct set of risk-based participation requirements associated with each system,” a Payments Canada spokesperson said. “Additionally, a settlement or clearing account with the Bank of Canada, which establishes criteria for system access, is required to participate in our systems directly.”

In September 2025, changes to the Canadian Payments Act (CP Act) were implemented, allowing Payments Canada to expand its membership to a wider range of participants. Expanded membership eligibility now includes registered PSPs as defined in the Retail Payment Activities Act, credit unions that are members of a credit union central, and clearing houses of systems designated under the Payments Clearing and Settlement Act.

This means new potential member participants can start preparing now for the Real-Time Rail and hit the ground running when the system goes live. “Payments Canada is eager to welcome these new potential members and is proactively contacting them to ensure they understand the steps to membership and the requirements for participation,” the spokesperson said.

In October 2025, Payments Canada implemented amendments to Canadian Payments Association By-laws No. 1 and 3 to reflect the changes made to the CP Act, as well as the RPAA’s introduction. “These amendments formally broaden membership eligibility and participation, ensuring Payments Canada’s critical infrastructure remains aligned with the new regulatory environment,” the spokesperson said. 

Major step forward

“Changes to the Canadian Payments Act and the Retail Payments Activity Act’s introduction mark a meaningful step forward in Canada’s payments modernisation journey,” said Brigit Carroll, Wise’s Head of Policy for Americas. “Policymakers and regulators’ efforts have paved the way for financial innovation and competition that will help providers like Wise to meet Canadians’ evolving needs. The proposed RTR implementation will be an important next step in enabling fast, affordable and transparent money movement, helping to realise the full benefits of expanded access to payment schemes.”

Payments+Partnerships’ Dina Vardouniotis said that fintechs achieving RPAA registration demonstrate a high level of operational and governance maturity to build reputational equity. “Meeting the Bank of Canada’s expectations for risk management, safeguarding and oversight strengthens credibility, which opens the door for partnerships with financial institutions,” she said. “By gaining access to RTR sandbox APIs, fintechs can test, iterate and innovate faster to deliver new payment solutions ahead of less mature competitors. This reduces dependency on intermediaries, thereby enabling control over their business.”

Dina Vardouniotis, founder and CEO of Canadian consultancy Payments+Partnerships

Adhering to the RPAA’s operational risk and fund safeguarding requirements and registering with the Bank of Canada contributes to greater confidence and credibility with consumers, evidencing proper risk management as well as a “seal of approval” that a payment service provider is subject to Central Bank oversight, said Abraham Tachjian, Chief Regulatory Affairs Officer at credit-card-as-a-service provider Brim Financial. Prior to joining Brim, Tachjian worked with the Department of Finance to develop Canada’s open banking framework and legislation.

“RPAA compliance also helps with FIs, giving them confidence that their potential fintech partner takes risk management seriously and has the proper controls and governance in place to avoid reputational risk issues,” said Tachjian.

Canadian payment ecosystem initiatives

Source: Payments Canada: “The payment industry in Canada”, https://www.payments.ca/payment-industry-canada

Regulation of PSPs under the Retail Payment Activities Act 

The Bank of Canada has introduced a new retail payment supervisory regime for PSPs performing retail payment services. This includes providers that maintain accounts or hold funds for end users (i.e. digital wallets), initiate electronic funds transfers at an end user’s request, or provide clearing and settlement services. PSPs will be required to register with the Bank of Canada and subject to certain requirements aimed at safeguarding end-user funds, mitigating operational risks and building confidence in the Canadian retail payment sector. 

Expansion of eligibility to become a Payments Canada member

Amendments to the Canadian Payments Act will expand membership eligibility to include PSPs covered by the Retail Payment Activities Act 2021, provincial credit unions that are a member of a credit union central, and clearing houses of clearing and settlement systems designated under the Payment Clearing and Settlement Act (PCSA).

Real-time payment system launch

Payments Canada is currently building the Real-Time Rail (RTR) 24/7/365 real-time payment system. The RTR’s goal is to enable fair, open and risk-based access to new and smaller participants including PSPs, and will include centralised fraud services on day one. 

Consumer-driven banking framework development

The government is developing a consumer-driven banking framework that will enable Canadian con­sumers and small businesses to transfer their financial data securely through an application programming interface. This will allow consumers to use secure data­-driven financial services that can improve their financial outcomes. Delivery of a fully opera­tional framework is expected by early 2026.

Alignment with international message standards 

SWIFT is decommissioning its existing payments messaging information standard in favour of ISO 20022, with universal adop­tion expected by November 2025. ISO 20022 will ensure richer data ele­ments and structured message components to promote greater harmonisation, accuracy, fraud prevention, efficiency and payment processing. This is important for smaller FIs and new entrants, given the potential benefits and cost savings associated with adopting this international standard.

Payments Canada’s high-value payment system Lynx and the future RTR are ISO 20022-com­patible systems. By adopting ISO 20022, users of Canada’s payment infrastructure will benefit from enhanced payment infor­mation, global interoperability to facilitate cross-border payments and efficiency in payment processing.