Payments Canada Launches Consultation on RTR Bylaws, Rules and Policy

On May 20, 2025, the Canadian Payments Association (Payments Canada) announced the launch of its public consultation (the Consultation) on the bylaws, rules and policy elements that will govern its new and long-anticipated real-time rail exchange (RTR Exchange), and clearing and settlement system (RTR C&S, and together with RTR Exchange, RTR). RTR is expected to be completed later this year. Drafts of the RTR bylaws and rules are included in the appendices to the Consultation. The Consultation is a follow up to the previous public consultation conducted by Payments Canada in 2020.

In this bulletin, we summarize key features of RTR as outlined in the Consultation, and how businesses that have traditionally not been able to participate in Canada’s payment systems may be able to do so, as Payments Canada members, through the RTR.

Canada’s RTR

RTR is intended to allow real-time final and irrevocable payments with 24/7/365 availability. The Consultation provides that businesses that participate in Canada’s RTR (Participants) will be required to make funds available to end users within 60 seconds. This means that once the RTR is live, all transactions made between sender and recipient will take approximately 1 minute to complete. Although payments are intended to be final and irrevocable, there will be exceptions to this, including in the event of errors, the payee’s account being in a foreign currency, suspected malicious or harmful content in a payment message, technical malfunction, restriction on the receiving Participant’s account or fraud.

Transactions will also be rejected if a Participant does not have sufficient liquidity available in its RTR settlement account with the Bank of Canada (the Bank) to settle its payments. This is an important risk-mitigation tool to ensure funds availability and the stability of RTR. It is also a key feature of its design to enable non-bank access to the RTR. In addition, the maximum value for an RTR transaction in RTR C&S has been set at $100,000 Canadian dollars.

As discussed in our prior post, in parallel with the development of the RTR, the Canadian Payments Act has been amended to expand eligibility for membership in Payments Canada to: (i) fintechs, paytechs and other payments businesses registered as payment service providers with the Bank pursuant to the Retail Payment Activities Act; (ii) credit union locals that are a member of a central or cooperative credit association; and (iii) clearing houses of clearing and settlement systems designated as such pursuant to the Payment Clearing and Settlement Act (Canada). The amendments, once in force, will allow these types of businesses to become members of Payments Canada, which will be one of the key requirements to become a Participant in RTR.

Types of Participants

The Consultation provides that there will be three ways a Payments Canada member may participate in RTR:

1. Direct Settlement Participant: A Participant settles their own payments directly through RTR.

Requirements include: (i) establishing a restricted settlement account with the Bank; (ii) meeting operational, technical and security requirements; (iii) completing required training and all testing requirements; and (iv) providing appropriate payment message routing information.

2. Settlement Agent: A Participant settles their own payments directly through RTR and also settles payments on behalf of an Indirect Settlement Participant (defined below).

Requirements include: (i) meeting all of the requirements of a Direct Settlement  Participant, above; (ii) establishing an unrestricted settlement account with the Bank; (iii) completing the training and testing required to become a Settlement Agent; and (iv) providing Payments Canada with prescribed information about its Indirect Settlement Participants and Member Non-Participants (defined below).

Settlement Agents, while responsible for all transactions for which they act as agent, will be able to manage and monitor credit and liquidity risks by establishing “net debit caps” that limit payment activities of their Indirect Participants to a pre-determined fixed amount.

3. Indirect Settlement Participant: A Participant uses a Settlement Agent to clear and settle payments through RTR on its behalf.

Requirements include: (i) entering into an arrangement with a Settlement Agent; (ii) meeting operational, technical and security requirements; (iii) completing required training and all testing requirements; and (iv) providing appropriate payment message routing information.

All Participants will be required to satisfy the ISO 20022 message specifications and RTR Exchange API specifications (updated RTR sandbox APIs are expected to be available soon).

In addition to the foregoing, Direct Participants will be permitted to provide RTR services to Payments Canada members that are eligible to become Participants in RTR but choose instead to access RTR through an existing Direct Participant (Member Non-Participants).

In addition to Participants, other potential roles in RTR will include:

• Connection Service Providers: Service providers that connect a Participant to the RTR Exchange.
• Competitive Services: Payment schemes, products or services that support the processing of an RTR payment message.
• Third Party Exchanges: Payment exchanges that are permitted to submit instructions to the RTR C&S.

Compliance with RTR Bylaws and Rules

The Consultation states that Payments Canada intends to monitor Participants’ activities to ensure compliance with the bylaws and rules of the RTR, and will make reports to the Bank.

Of note, Participants will be required to document and implement the following:

• policies and procedures for claims and complaints relating to processing and end-user errors, as well as fraud;
• procedures for escalating claims and complaints relating to situations of exceptions, where a payor or payee disputes the actions or decisions of a Participant; and
• obtain membership in an independent external complaints body that deals with payor and payee complaints relating to disputed exceptions, such as the Ombudsman for Banking and Investment Services or the Participant’s regulator.

Fraud Controls and Reporting

The Consultation also notes that Participants will have fraud-specific obligations, including using centralized fraud services for participation in the RTR (including confirmation of payee, a central risk list, fraud analytics and reporting), in addition to internal control standards. Payments Canada will have visibility over fraud for each Participant due to requirements for Participants to submit fraud reporting data to Payments Canada and Payments Canada will have the ability to take action if fraud volumes exceed specified thresholds.

The consultation period on the RTR bylaws, rules and policies is open until July 2, 2025 and submissions can be made to Payments Canada via email to consultation@payments.ca.

Please do not hesitate to reach out to the authors of this post or your legal professional at McCarthy Tétrault LLP for assistance with navigating the legal aspects of Canada’s payment systems, including participation in the RTR.