The research of Professor Ali Akyiol, an Associate Professor at the Telfer School of Management, focuses on corporate finance and governance. He provided some insight into how this new system will impact Canada’s financial institutions and their customers.
Question: What does the arrival of RTR signify to Canadian financial institutions?
Ali Akyol: With the Real-Time Rail, Canada is finally catching up with countries like the UK (FPS), Australia (Osko, PayID, and PayTo), and Brazil (Pix), where instant payments have been available for years. But getting the system up and running is just the first step. It will only be useful if everyone is connected, and Canada’s largest banks are not expected to be fully on board until well into 2027. They also have little incentive to rush, since faster payments could cut into the fees they currently earn.
Q: What challenges does this new technology present to legacy institutions?
AA: When money can move instantly at any time of day, banks have to rethink how they manage their cash. Imagine a small credit union heading into a long weekend. Gig workers expect their pay on Saturday, businesses need to pay suppliers on Sunday, and every transaction must be covered as soon as it goes through. In the past, incoming and outgoing payments would balance out over time, with settlements handled during regular business hours. Now, the credit union cannot simply wait until Tuesday to replenish its funds. It needs to make sure it has enough cash available before the weekend even begins. For smaller financial institutions, that adds a whole new layer of pressure to managing their money.
Q: Are there any drawbacks, concerns?
AA: Fraud is one. Once a payment goes through, there is no easy way to get the money back, making scams potentially more attractive to criminals and more costly for victims. The UK has already grappled with this problem and now requires banks to share the cost of reimbursing scam victims. Canada, however, has yet to decide who should foot the bill.
Q: What will RTR look like once it’s up and running in Canada?
AA: I’m not sure Canadians will see much difference at all. Many already consider Interac e-Transfer to be instant, so speed alone probably may not be enough to win them over. The bigger opportunity is for businesses, which could benefit from faster payroll, quicker supplier payments and less time spent matching payments to invoices.
After years of delays, Canada’s Real-Time Rail will be launching in the coming weeks.