Real-time payments: Wealthsimple goes first, the big banks wait

Real-time payments in brief

The RTR is a new national payment infrastructure. It exchanges, clears and settles payments between financial institutions in real time, 24 hours a day, holidays included. Until now, retail payments went through the Automated Clearing Settlement System (ACSS), which works in batches.

Once a payment is settled, the recipient generally has access to the funds within 60 seconds, according to Payments Canada's FAQ. Each payment also carries detailed data through the ISO 20022 standard, which helps a business match a payment to the right invoice.

One condition limits the system's reach at first: both the sending and the receiving institution must take part in the RTR. A transfer between a participant and a bank that is not yet connected does not benefit from instant settlement.

Wealthsimple, the first institution on the RTR

Wealthsimple is the first institution to have put the RTR in place. Its name heads the list of participants live at launch published by Payments Canada. In its press release, the company states that it holds the largest Canadian market share among those participants.

This lead has been building since 2022. That year, Wealthsimple became one of the first securities dealers to join Payments Canada. It was also the first company that is neither a bank nor a credit union to be granted a settlement account at the Bank of Canada. That account gives it direct access to the RTR, without relying on a bank as an intermediary.

For its clients, the effect will not be immediate. Wealthsimple says it is still testing capabilities and plans to roll out new instant payment features in 2027. The connection is done; the new features in the app will follow.

Online banks vs traditional banks

The first RTR cohort says a lot about Canadian banking. It includes consumer digital players (Wealthsimple, KOHO, Questrade's Questbank), institutions that act as infrastructure for fintechs (Digital Commerce Bank, Peoples Trust Company), two payment service providers (Paramount Commerce, DoBusiness.com^TM), and an international bank focused on businesses (Bank of America).

None of Canada's six big banks (RBC, TD, BMO, Scotiabank, CIBC, and National Bank), nor Desjardins, is connected at launch. Payments Canada says all major financial institutions have applied for access and that the RTR will reach more than 9 in 10 Canadians within its first year. Desjardins, National Bank, and CIBC are among the organizations that contributed to the project, according to the release, without being live on day one.

Why digital players arrive first

Payments Canada does not explain the order in which institutions joined. Our reading: connecting to a new payment system is simpler for a company built on recent technology, with a single app to adapt, than for a bank that has to link decades of systems, a branch network, and hundreds of products. Wealthsimple's case also shows that direct access to settlement, obtained years earlier, shortens the path.

The limits of this head start

Being connected early does not solve everything. A payment network is only as useful as the number of people it can reach, and that number stays small as long as the big banks are not on it.

What to watch: fees

Payments Canada has not said what institutions will charge their clients for a real-time payment. The RTR is infrastructure: each participant decides on its products, limits, and prices, and can set a per-transaction limit lower than the system's. That is where the competition between online and traditional banks will play out. A free instant payment at a digital player, against fees at a big bank, would become a choice factor as concrete as the monthly fees on a chequing account.

What about Interac e-Transfer?

Interac e-Transfer is not going away. According to the Bank of Canada, the RTR will also clear and settle payments sent by Interac e-Transfer. Interac is in fact the RTR's technical operator and its first fraud services provider.

In practice, you will keep sending your transfers the same way. It is the settlement between institutions, in the background, that will move to the RTR as the rollout progresses. For a refresher on current limits and fees, see our Interac e-Transfer guide.

Fraud protection from day one

According to Payments Canada, Canada is the first G7 country to launch a real-time payment system with mandatory centralized fraud services from the start. These services add to each institution's own controls:

• confirmation of payee, available at launch for consumer accounts;
• a fraud risk score attached to transactions;
• a directory of fraud risks and indicators;
• a fraud reporting and intelligence-sharing platform.

Payments Canada notes that no system is completely immune. Speed also has a downside: RTR payments are final and irrevocable, except in cases set out in the system's rules. In case of error or fraud, the sending institution can request a return of funds, but the decision rests with the institution that received them.

What it changes for businesses

Businesses are the first target. A payment that arrives in seconds, with its detailed data, gives a real-time view of cash flow and shortens the wait between an invoice and its payment. According to Payments Canada research, 60% of Canadian businesses say they are ready to adopt real-time payments.

The C.D. Howe Institute, cited by Payments Canada, estimates that the features available at launch will generate up to $14.5 billion in cost savings over the next decade. Those savings would come from lower processing costs, less use of cash and cheques, and a shorter period during which funds are unavailable. Self-employed readers comparing their options can read our review of Wealthsimple business chequing.

Under Bank of Canada oversight

The RTR is not a private project left to itself. Bank of Canada Governor Tiff Macklem designated it as a prominent payment system under the Payment Clearing and Settlement Act.

Our analysis: who benefits first

The RTR launch changes nothing overnight in your banking app. It changes the order of arrival. On a national payment infrastructure, digital players such as Wealthsimple and KOHO are starting ahead of the big banks.

If you already have an account with one of the participants, you will be among the first to use instant payments, as these platforms switch them on. If your money is at a big bank, there is no rush: they have all applied for access, and the target coverage is more than 9 in 10 Canadians within a year. The factor to watch in the coming months will be price. The first institution to offer free, unlimited instant payments will have a strong argument with clients.

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