Real Time Rail and Changes to the Canada Payments Act: Guidance for Fintech

Prior to changes made in October of 2025, fintechs and credit unions needed a Payments Canada member to clear and settle payments, such as cheques, bill payments, or payroll deposits, for them. Only banks could be members of Payments Canada, the nonprofit in charge of operating Canada’s payment infrastructure. Payments Canada controls the rails – the only systems that we have in Canada to clear and settle retail payments. 

Payments Canada members previously included the Bank of Canada and charter banks, trust and loan companies, credit union centrals, and life insurers, as well as some other deposit-taking institutions. Until October of 2025, if fintechs, credit unions, and other payment services organizations wanted users to run payroll, pay bills, or write cheques, they needed a Payments Canada member to act as a partner. 

If the partner cleared payments for a non-member, the member would be responsible for ensuring that they follow all the rules. Partners might charge more, demand stricter contracts, or put their non-member organization under scrutiny. Critics argued that this requirement stifled innovation for Canadian fintechs and credit unions. In October of 2025, access to the rails was cleared for some fintechs and credit unions. 

Why Canada’s Payment Act is Changing

In October of 2025, Payments Canada implemented amendments to the Canadian Payments Act (CP Act) and introduced the Retail Payment Activities Act (RPAA). The goal of these changes is to encourage broader membership in Payments Canada – which now includes fintechs and credit unions. Companies like Wealthsimple, Koho, and Brim have all been tapped to join, with plenty more applications pending. 

The RPAA is a legal framework for all payment service providers in Canada. A payment service provider (PSP) is a company entity (like a bank, fintech or a credit union) that holds funds for an end user. PSPs perform electronic fund transfers, provide clearing services, and settle payments. 

Are you a PSP? Basically, If you touch, move, store, or trigger someone else’s money – you’re a PSP, and you are governed under RPAA. Banks must register as a PSP under RPAA if:

• You are a PSP
• You perform retail payment activities
• Your payment falls under the scope of RPAA (you offer services to individuals in Canada)
• Your retail payment activities are not excluded under RPAA

RPAA forces PSPs to register, safeguard user’s funds, draft risk controls, and report incidents. However, RPAA does not grant payment privileges, even for compliant entities. In the past, if you wanted to clear or settle payments as a PSP (like cheques, bills, or payroll) you needed a clearing partner. Now, thanks to new amendments, PSPs have a pathway to join them. 

Will Fintechs Join the Real Time Rail? 

Amendments to By-law 1 added more PSPs to the potential members of Payments Canada. This gives new members access to payment rails, faster and cheaper settlements, and the ability to operate without a partner. But are all fintechs and banks excited?

Despite the potential benefits of Payment Canada membership (no need for a partner organization, no 3-5 business day clearing period), not every fintech or credit union is interested – and a big reason for this is their belief (or lack of) in Real-Time Rail. 

Membership in Payments Canada gives you access to Real-Time Rail — which doesn’t currently exist. Real-Time Rail is an instant payment processing system organized by Payments Canada. Instead of going through a private service (like Interac) to process payments, Real-Time Rail would allow users to transfer money instantly. Despite the benefits of this technology, not every fintech company is interested – when it comes to something like payroll, for example, the 3-5 day clearing period is well established and often built into accounting software already. 

Instant payments simply aren’t needed in many cases, and some organizations doubt the possibilities of Canada’s new system. Membership in Payments Canada is expensive – organiations must build out a compliance program that meets specifications, maintain the technology behind it to Payments Canada specifications, and have a fully staffed compliance team. 

With Real-Time Rail not supposed to be up and running until 2026, companies are getting ready – but are not exactly rushing to hop on board. With the new payment rails still (possibly) years away, only time will tell whether Canadian fintechs become a bigger part of the official payment landscape.