Real-Time Payment Series: Part 2 Are Canadian Businesses Ready?

Posted on February 1, 2022

We can expect real-time payments (RTP) to go live in 2023 Canada-wide. And it’s time for Canadian businesses to prepare. The time to gain insight and learn more is now. Up until now, Canada has notably lagged behind. However, this year that is about to change. And for the better.  

Sourcing knowledge from those that have RTP in place. In 2008 the U.K. launched their real-time solutions. Given that they are fifteen years on, it could serve us well to learn from those who have been there before.  

As discussed in the first article in this series, we touched on the real-time payments landscape. In this piece, we bring it a little closer to home. What has happened around the world shines a light on what we can expect to see here in Canada. We speak to the benefits to businesses and how we expect the gig economy to factor in. We conclude by offering a way for companies to be the first and begin wading in. 

"The Real-Time Rail (RTR) - a new national real-time payment system - will support faster, data-rich payments and act as a platform for innovation and competition" 

Cyrielle Chiron, Chief Strategy Officer, Payments Canada.

What’s happening with real-time payments around the world? 

Around the globe, RTP’s pick-up speed. In fact, more than 40 countries are operating with RTP solutions in place. Additionally, as of writing, six more countries plan to launch before 2023. 

According to Deloitte, RTP’s in the U.S. are skyrocketing; the year-over-year growth sits at an impressive 69%. The wave of payment innovation has taken hold of the U.S. FIS Senior Vice President Ginny Chappell likens moving from legacy payments to RTP is like going from dial-up to 5G; there’s no comparison.

U.K.: The act to follow. Since its launch in 2008, over 9 billion payments have been sent across the U.K., amounting to a combined value of over £6 trillion.

INDIA: Rates as top-notch. India’s real-time payments platform (IMPS) was recognized as the world’s best real-time payments system in 2019. The platform processes over 250m transactions amounting to $20 billion every month.

SINGAPORE: Unstoppable and FAST (Fast and Secure Transactions). Launching in 2021, Singapore’s immediate payments platform is processing almost 100,000 transactions per day, with a value of nearly $147 million transferred daily.

Real-time Payments Global Map

Worldwide real-time payments are riding the coattails of contactless payment trends. The pandemic gave digital payments a massive boost, and there’s no going back now.

The global RTP market size was valued at $6.9 billion in 2018. This is projected to expand at a Compound annual growth rate (CAGR) of 29.3% from 2019 to 2020. It is not surprising that both Mastercard and Visa are exploring immediate payment solutions as the volume of real-time payments continues to grow globally. According to Deloitte, we can expect this only to accelerate the adoption and build-out of RTPs.

Real-time payments in Canada 

Interac Corp. will be the exchange solution provider for Canada’s real-time payments system, RTR—expected to be live in 2022.

In March 2021, Payments Canada announced Interac Corp. as the exchange solution provider for Canada’s real-time payments system, the Real-Time Rail (RTR). This announcement follows a selection process that includes participation from the Bank of Canada.

Interac, used daily by millions of Canadians, will leverage the technology behind the Interac e-Transfer service to build the exchange solution for the RTR. This includes supporting the ISO 20022 messaging standard and compliance with the Bank of Canada’s risk management standards for prominent payment systems. 

The RTR is a fundamental part of Payments Canada’s multi-year industry program to modernize the infrastructure, rules and standards that underpin payments in Canada. Operated by Payments Canada and regulated by the Bank of Canada — this real-time payments rail will allow Canadians to initiate payments and receive irrevocable funds in seconds — 24 hours a day, 365 days a year. The system will support payment information travelling with every payment by leveraging the ISO 20022 data standard.

The Canadian gig economy and real-time payments 

RTPs impact on the gig economy. 

Real-time payments (RTP) = immediate fund availability, settlement finality, instant confirmation, and integrated information flows, all in a payment made in seconds.

RTP’s gig economy use case: Freelance and contract work is on the rise. For example, Payments Canada reports 37% of businesses already employ gig workers. Furthermore, 40% of those gig workers say they want better, faster, and traceable ways to get paid. And that is where real-time payments step in.

What’s next for Canadian businesses?

Real-time payments promise a rosy future for enterprises. Businesses today spend much too much time, energy and dollars on reconciling payments. Process and reconcile payments fast with RTPs in place. Efficiency becomes the new normal as businesses request payments with a mere button press. 

Everything becomes more manageable in terms of reconciliation. With RTPs, there are no more cheques, no more paper invoices and no more wasted time trying to figure out where a payment originated.

“Undoubtedly, we have huge opportunities to help out small businesses with cash flow and liquidity. Real-time payments become a meaningful solution that can substitute more costly alternatives like borrowing to make payroll” 

Ginny Chappell, FIS.

Imagine getting paid on time every time. This level of innovation in payments benefits businesses, workers, and the entire Canadian economy.

Step into the future today with VoPay RTPs 

Take control over your cash flow. No one gets the importance of real-time payments better than us.

VoPay’s e-Transfer for Business solution is a simple, convenient, and secure way to send and receive near real-time payments at scale directly from one bank account to another. The service is available through API integration or using VoPay’s intuitive payment portal. 

Send unlimited transfers up to $25,0000 per transaction using only an email address. Doesn’t get much simpler than that. Contact VoPay today to discuss Interac e-Transfer for Business.

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