Payments Canada launches long-delayed instant payments system
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Canada → launch → system
The new system is expected to enable members to exchange, clear and settle payments in real time
Payments Canada says it has launched its real-time rail national payment system, which is expected to speed day-to-day payments for Canadian businesses and consumers.
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which → expect → businesses
It says the new system is expected to enable participating members to exchange, clear and settle payments securely in real time.
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system → say → time
"The launch of Canada's real-time rail marks the beginning of a new era for payments in our country," Payments Canada CEO Susan Hawkins said in a news release Monday.
"
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Hawkins → mark → release
As a national asset that's designed specifically for our country, the [real-time rail] gives the payment ecosystem a modern foundation to build on.
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rail → design → foundation
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The system is expected to generate savings from lower processing costs, reduced use of cash and cheques and a shorter period during which funds are temporarily unavailable to the recipient.
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funds → expect → recipient
The initial participants include Wealthsimple, Questbank, Peoples Trust Co., Paramount Commerce, Koho, DoBusiness.com, Digital Commerce Bank and Bank of America.
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participants → include → America
Additional participants are expected to be added in the coming months, including all of the major Canadian financial institutions.
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participants → expect → institutions
Transactions that pass through Payments Canada systems include debit card payments, pre-authorized debits, direct deposits, bill payments, wire payments and cheques.
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that → pass → payments
Henry Kim, a professor at York University's Schulich School of Business, said the announcement is a step in the right direction.
"There's a thread that we have to do this for our sovereignty, and we just have to keep up with the rest of the world.
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we → say → world
A lot of the world has real-time settlement," he said in an interview, adding it already exists in the U.S.
Payments
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it → have → U.S.
Canada has been years behind schedule on getting real-time rail in place, which allows near-instant payments clearing 24 hours a day, along with other improvements.
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payments → get → improvements
The organization originally aimed to have the system in place by 2019.
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organization → aim → 2019
The ability to more rapidly clear payments is particularly helpful for businesses, Kim said
"It also means that if you're tight for cash, if you're a business and your working capital runs low, you can get paid much faster by other businesses," he said.
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he → clear → businesses
Payments Canada said the real-time rail system will also come with mandatory centralized fraud services and controls, including confirmation of payee, a fraud transaction safety score, a list of fraud risks and a platform for fraud reporting.
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system → say → reporting
Kim, who works with U.S. credit unions on payment technology, said there are some concerns among U.S. financial institutions about fraud-related risks from real-time payments, with some U.S. banks electing not to provide the feature to customers.
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banks → work → customers
"Because when you get rid of that lag, there's less time for verification so someone could actually make a fraudulent transaction.
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someone → rid → transaction
And with the real-time rail, oftentimes you don't get that back," he said.
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he → get → that
"Canada's actually done something different from the U.S., and I think it's actually really good to have that centralized."
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that → do → U.S.
The Aporia
