Payments Canada Publishes RTR Participation Guide for Payment Service Providers

On August 21, 2025, Payments Canada published its RTR Participation Guide for Payment Service Providers (Guide), clarifying how payment service providers (PSPs) can become participants in Canada’s new real-time payments system, the Real-Time Rail (RTR).

The Guide follows Payments Canada’s public consultation on the legal and policy framework for the RTR, including the RTR By-law and Draft RTR Rules, which closed on July 2, 2025. Final versions of the RTR By-law and RTR Rules have not yet been published. For further information on the status of RTR implementation, see our Blakes Bulletin: Canadian Payments Update: Significant Developments Anticipated in 2025.

Once amendments to the Canadian Payments Act come into force, PSPs that register with the Bank of Canada under the Retail Payment Activities Act (RPAA) will be eligible to apply for Payments Canada membership. In addition to system access, this membership will grant PSPs governance rights, including eligibility for Board and committee participation. Although PSPs will be eligible for Payments Canada membership, participation in the RTR is not automatic and will require approval by Payments Canada and the Bank of Canada. Given the demanding entry requirements, not all PSPs will be in a position to participate directly in the RTR.

Once implemented, the RTR will operate as Canada’s real-time gross settlement system for retail payments. It will facilitate the exchange, clearing and settlement of irrevocable payments in real-time, 24/7/365. Once an RTR payment is initiated, it must be exchanged, cleared and settled between the sending and receiving financial institutions within 10 seconds, and made available to the recipient within 60 seconds.

The Guide sets out the legal, operational and technical framework for PSPs, clarifies membership eligibility, and highlights the compliance and risk management obligations that will govern RTR participation. The Guide also indicates that the amendments to the Canadian Payments Act are expected in Fall 2025.

Below is a summary of the onboarding process and key business, operational and technical requirements that PSPs must satisfy before becoming RTR participants.

Application and Onboarding Process

To become an RTR participant, a PSP must be registered with the Bank of Canada under the RPAA and complete an application for Payments Canada membership under the Canadian Payments Act. Membership applications are approved by the Payments Canada Board of Directors, which meets quarterly.

A PSP satisfying these requirements must submit an RTR application and complete the participant onboarding process. To apply, PSPs must determine their preferred models for connectivity and settlement, as described below. Applications will be reviewed by Payments Canada, which will make a recommendation to Payments Canada’s President for conditional approval, pending successful completion of program activities leading to go-live. The conditional approval process will take approximately two to three weeks.

Upon receiving conditional approval, applicants will begin onboarding activities, which include RTR connectivity testing, attending workshops with Payments Canada, engaging in certification testing in the RTR testing environment and implementing mandatory fraud and monitoring tools. Prior to admission as a participant in the RTR system, applicants must also provide Payments Canada with evidence that they satisfy the participation requirements discussed below.

The Guide notes that the RTR approval and testing process will likely take several months.

Models for RTR Connectivity and Settlement

PSPs will need to determine how they will connect to the RTR payment system to exchange and settle RTR payments. The following PSP participation models for connectivity and settlement will be available.

1. Connectivity Models: The Guide provides three models for PSP connection: direct connection to the RTR Exchange, connecting to the RTR Exchange through service providers (such as payment processors, gateways and aggregators) or using a combination of direct and third-party connections. Direct connectivity participants will be subject to additional technical and operational requirements and a heavier compliance burden than PSPs that rely on third parties for connection to the RTR.
2. Settlement Models: RTR participation is based on a tiered framework. PSPs that become direct settlement participants must have an RTR settlement account with the Bank of Canada. The settlement accounts can either be “unrestricted” (for direct participants that will clear and settle payments both on their behalf and on behalf of indirect participants) or “restricted” (for participants that will clear and settle payments only on their behalf). Indirect settlement participants must enter into arrangements with a direct participant (a settlement agent) to clear and settle their payments on their behalf.

RTR Participation: Integration Requirements for PSPs

The Guide sets out the business requirements for PSPs to become RTR participants and integrate with the RTR system, including the capabilities, processes and technology requirements participants must satisfy.

1. Payment Exchange: Once a payment is initiated on the RTR, the payment must be exchanged, cleared and settled within 10 seconds, and funds must be available to the payee within 60 seconds. To facilitate such communication, the RTR uses ISO 20022, an international standard for financial messaging enabling the transmission of richer payment data fields. Participants must ensure that their systems comply with ISO 20022 standard and accept and transmit the specific RTR payment messages set out in the Guide. The new ISO20022 standard is also expected to facilitate compliance with the “travel rule” under Canadian anti-money laundering legislation.
2. Clearing and Settlement: The RTR will operate as a real-time gross settlement system. To send a payment over the RTR, participants must maintain sufficient funds in their settlement account to settle the payment obligation in real time; otherwise, the payment will be rejected. Direct settlement participants must enter into a Bank of Canada Settlement Account Agreement, prefund their settlement accounts and proactively manage and maintain a sufficient cash balance.
3. Returns: RTR payments are final and irrevocable, although the Draft RTR Rules contemplate specific circumstances where a payment can be returned. For example, a sending participant may request a return within 60 days in certain cases of errors, unauthorized RTR payments or fraud. A receiving participant does not have an express obligation to return the amount of the RTR payment message, but it must respond to the request within 10 calendar days and, if it elects to return the payment amount, must initiate the return within 90 days.
4. Recourse and Complaints: Participants must have policies and procedures in place to address claims or complaints related to processing errors, end-user errors and fraudulent payments. The policies and procedures must outline the participant’s obligations to its clients, including its obligation to investigate claims of exceptions, reimbursement or requesting a return of funds, and escalation. Participants are required to be members of an external complaints body, such as the Ombudsman for Banking and Investment Services.
5. National Payment Fraud Services: All RTR participants are required to implement policies and procedures supporting the following four centralized fraud management tools.
   • Central Risk List: a centrally managed shared database of account identifiers and fraud-related attributes flagged by participants as either suspected or confirmed fraud.
   • Central Fraud Analytics: a tool that assesses the likelihood that a payment is fraudulent before it is entered into the RTR system and produces a numerical fraud score and recommendation for each payment message Sending participants must have processes in place to receive and respond to fraud scores via API. 
   • Central Fraud Reporting: a dashboard accessible to participants via a fraud portal.
   • A Confirmation of Payee system: a tool that verifies payee details before the payor submits a transaction. Participants must implement and use a confirmation of payee service for all payments sent from personal accounts, allowing customers to verify that the payee’s name and account number entered match their intended payee prior to sending funds. Participants can also use a third party confirmation of payee tool that meets the service standards set by Payments Canada.

Along with the mandatory centralized fraud tools, the Draft RTR Rules require participants to implement multi-factor authentication or another equivalent method to authenticate payors prior to sending a payment and establish and regularly update clear internal processes to investigate and respond to fraud indicators. The Draft RTR Rules provide that participants will also be required to adhere to fraud thresholds set out in a forthcoming RTR Fraud Services Manual, and incidents of fraud may result in a temporary restriction or review of a participant’s use of the RTR system.

RTR Participation: Operational Requirements for PSPs

PSPs must also meet operational requirements related to participating in the RTR exchange, and in clearing and settlement. These include incident notification obligations and reporting of detailed fraud statistics through the Central Fraud Reporting portal.

Next Steps

Despite significant delays in implementation, the RTR is poised to significantly change the Canadian retail payments landscape by enabling instant, irrevocable payments. For PSPs, the opportunities include faster and richer payment solutions and new products for customers. To prepare for the launch of the RTR, PSPs should review the Guide, RTR By-law and Draft RTR Rules and begin assessing their readiness to satisfy technological requirements and compliance obligations under the RTR’s operational and fraud frameworks for the RTR application. Additionally, to avoid delays, PSPs that are interested in participating in the RTR should begin preparing a Payments Canada membership application for submission once the Canadian Payments Act amendments come into force.

For more information, please contact the authors or any other member of our Financial Services Regulatory group.