Leadership changes at Payments Canada as it races to launch the overdue Real-Time Rail system
Payments Canada is currently undergoing a leadership transition during a critical period of implementing a faster payment system, the Real-Time Rail, which is significantly behind its initial schedule.
This delay places Canada as the only G20 nation without such a system, impacting merchants, consumers, and the efficiency of online payments.
Payments made online, for example, before a long weekend, may not be processed until the following business week, a modern system promises near-instant transactions, 24/7.
The C.D. Howe Institute, in December, estimated the economic benefits of such a system at approximately $3.24bn over five years.
Jeremy Kronick, director of the Centre on Financial and Monetary Policy at the think tank, emphasized the significant benefits for those affected by current limitations, citing personal challenges with e-transfer limits that impact large transactions like home purchases.
The faster system could increase transaction limits and reduce the need for cheques and money orders, offering considerable savings and efficiency gains.
However, the introduction of instant large sum transfers raises fraud concerns, though Kronick suggests these can be managed with appropriate regulations.
The appointment of a new CEO for Payments Canada will be paramount, following Tracey Black's departure after her term ended. Interim co-CEOs Kristina Logue and Jude Pinto are currently leading the organization, which cleared and settled over $112tn last year.
Despite the original 2019 target for the Real-Time Rail, no new launch date has been set, with an update expected in the coming weeks.
The delays have implications for competition within the financial sector, particularly affecting fintechs and smaller companies.
Alex Vronces, executive director at Fintechs Canada, highlights the challenge of competing without the Real-Time Rail and points to the potential leveling of the playing field with the expansion of Payments Canada's membership to include new service providers and credit unions.
This expansion, promised by the federal government, could allow competitors direct access to the new payments system, underscoring the urgent need for its implementation.
