Faster money transfers with RTR will take a while to adopt, says Scotiabank

Payments Canada’s recently announced upgraded digital payments framework Real-Time Rail (RTR) aims to streamline how money moves electronically between consumers and businesses, but it could take several months or years to become the norm for most major financial institutions and banks.

That’s according to a report released Thursday from Scotiabank, and authored by senior economist David Cimon, which says Ottawa’s plans to see more “instant” payments will be anything but an instantaneous rollout across Canada.

“This system launches with a lot of promise, namely the ability to conduct instantaneous payments between both businesses and consumers, 24/7,” said Cimon in the report.

“While the option of instant payments will help, structural changes by businesses will take longer than merely activating the system.”

4:11 Credit card myths debunked

Payments Canada on Monday announced the launch of Canada’s Real-Time Rail (RTR) payment system, allowing consumers and businesses to send and receive payments instantly.

Story continues below advertisement

From gig workers getting paid instantly to Canadians being able to transfer money between their accounts much faster, the new system could have impacts on how Canadians move their money.

RTR is “an important step in modernizing Canada’s payment infrastructure,” Bank of Canada Governor Tiff Macklem said on Monday, as the central bank brought the new payment system under its formal oversight.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Canadians will be able to send and receive money “any hour, any day, all year round,” Finance Minister Francois-Phillipe Champagne said, adding that the RTR system was “built around international standards.”

Scotiabank’s report says the RTR system, in theory, will be beneficial to both consumers and businesses, but there will be delays in adopting it.

For one, not all banks and financial institutions will be using it immediately, and if anything, it will likely take Canada’s biggest banks the longest to utilize the RTR system.

Story continues below advertisement

Canada’s largest commercial bank, RBC, says it plans to introduce the RTR into its systems in the second quarter of 2027, and although most other big banks are expected to join shortly after, including Scotiabank, TD, BMO and CIBC, they have not given any specific timelines as of yet.

The only participants in the RTR’s initial launch are as follows:

• Wealthsimple
• Questbank
• Peoples Trust Company
• Paramount Commerce
• KOHO
• DoBusiness.com
• Digital Commerce Bank
• Bank of America

The big Canadian banks were excluded from this phase because Payments Canada wants to ease into the RTR system roll out by using smaller Canadian institutions along with Bank of America to test the system’s stability.

“None of the Big-5 banks are part of this wave. In general, to use RTR, both parties’ financial institutions must be a member. This will limit volumes until large institutions join and network effects occur,” said Cimon in the report.

“The entry of new participants later in 2027 will likely be a necessary condition for transaction volumes to increase meaningfully.”

“While there is understandable excitement about use cases for RTR, its real ability to transform the payments system will be limited by business’ own abilities to adapt their processes.”

9:23 Can Canada ever go cashless?

Businesses and consumers who rely on cash or paper cheques for certain transactions are “dedicated users” and may also be slower to adopt the RTR system into their regular financial routines — even if the RTR makes things more efficient and convenient, the report says.

Story continues below advertisement

Scotiabank cites its own data along with that of Payments Canada, saying that cash payments continue to be the most popular form of physical or paper payments, but commercial cheques comprise the overwhelming majority of all paper payment values.

The average transaction size or value of cash in 2025 was roughly $24, while the average commercial cheque was around $13,600.

Cash may continue to have its benefits for some users, including non-traceability and non-dependence on an intermediary, but the report says that cheques don’t have the same value and are “a prime case for disruption.”

“Cheques are slow, both in terms of transit time from payer-to-payee and in time to clear once cashed. They also rely on either dealing directly with a financial institution or using expensive cheque-cashing services,” said Cimon in the report.

“While it’s unlikely that systems built on RTR will replace commercial cheque use entirely, this is an area with a high market value and a large degree of potential improvement.”

But getting companies to move away from paper cheques for business transactions may be a challenge, especially for larger ones, because it means rewiring how their financial back offices operate. Day-to-day bookkeeping, tracking bill payments and managing multi-day clearing times can’t just be flipped like a light switch — even if a faster option like RTR is available.

Story continues below advertisement

RTR also has potential benefits for employees because it can help them get paid much sooner, but the report says this will also take a while to become a reality for the majority of workers that get paid through their employer’s payroll systems.

That’s mainly because businesses will need to make structural changes to integrate RTR that will take “longer than merely activating the system.”

“The prospect of instantaneous payment of wages is unlikely for many employees, as this requires both the logistical ability to process payroll in real-time but also the willingness of employers to move off the standard 2-week payroll schedule,” said Cimon in the report.

“Similarly, in business-to-business transactions, accounts payable departments will still need time to process invoices.”