The RTR creates capability. Competitive services create utility.
Canada’s Real-Time Rail (RTR) is approaching launch. It will provide a new foundation for real-time, data-rich, account-to-account payments that clear and settle between participants 24 hours a day, seven days a week.
But the RTR itself is not the product customers will use.
The real opportunity lies in the services built above the rail: the experiences that determine how a payment is initiated, how information is exchanged, how businesses reconcile transactions and how consumers and organizations experience the movement of money. This is what we refer to as ‘overlay services’.
That was the focus of a Payments Canada SUMMIT panel moderated by David Hooper, Vice-President, Banking & Payments Consulting at CGI. David was joined by Michael Liberty, Vice-President, Global Money Operations at CIBC, and Abraham A. Tachjian, Chief Regulatory Affairs Officer at Brim Financial, to discuss the business case for overlay services and competitive services on the RTR.
From payment infrastructure to customer value
The panel explored a central question for banks, fintechs and payment service providers: what will cause people and businesses to use the RTR?
The answer is unlikely to be real-time settlement on its own. Customers do not ask for a payment rail. They look for a better way to collect an invoice, pay a supplier, receive an insurance disbursement, settle a transaction or manage their cash flow.
That is where overlay services come in. They connect the RTR’s core capabilities, including speed, finality, 24/7 availability and structured ISO 20022 data, to specific customer needs and business processes.
The value may come from request-for-payment services, embedded payment experiences, improved reconciliation, merchant solutions, data-driven cash-flow tools or new approaches to business disbursements. The winning services will be those that solve a problem, remove friction or make an existing process meaningfully better.
The opportunity is commercial, not simply technical
The discussion also highlighted why business and commercial use cases may be especially important in the early stages of adoption.
Canada already has familiar consumer payment experiences, including Interac e-Transfer. For many consumers, faster settlement behind the scenes may not be enough to change established behaviour.
Businesses, however, have more direct reasons to adopt services that improve the movement and management of money. Faster access to funds, richer payment data, automated reconciliation and more efficient collections can reduce administrative effort and improve working capital.
For financial institutions and other payment providers, connectivity to the RTR will increasingly become a foundation. Differentiation will come from the products, channels, workflows and customer experiences built on top of it.
Trust will determine adoption
The panel also addressed the risks that accompany real-time payments. When funds move quickly and are difficult to reverse, fraud controls, identity assurance, confirmation of the payee, operational readiness and effective exception handling become central to the customer experience.
Real-time payments must be more than fast. They must be trusted!
As the RTR moves from infrastructure delivery toward market adoption, the competitive question will shift from who can connect to the rail to who can create services that customers understand, trust and choose to use.
Listen to the full conversation on Payments Canada’s PayPod:
