How will Canada reinvent its payments framework for a post-pandemic digital reality?

Torys | Adam S. Armstrong | Oct 21, 2020

digitalll 300x256 - How will Canada reinvent its payments framework for a post-pandemic digital reality?  Alternative digital payment solution platforms have entered and expanded the market and niche offerings, ranging from independent online trading platforms to digital loans and new financing providers. Add to this mix the COVID-19 crisis, which has proven a major change agent accelerating the already fast pace at which digital transformation has been taking place in the financial services industry.

To address the significant momentum for change taking place in the financial services sector, Payments Canada is undertaking a multi-year initiative to modernize the nation’s payments ecosystem.

See: Mastercard and Visa seek to get the most out of the digital-payments boom

Payments Canada is responsible for the operation of the national clearing and settlement infrastructure and is currently in the process of implementing a new real-time payments system. The new system (referred to as Real-Time-Rail, or RTR) will be comprised of two main components: 1) the RTR Exchange; and 2) the RTR Clearing and Settlement.

The greater availability of secure payments data is arriving just in time to spur growth of fintechs in Canada by enabling new financial services, including through open banking APIs.

The RTR Exchange will facilitate the real-time exchange of payment messages between participants, and the RTR Clearing and Settlement will perform the real-time clearing and settlement of transactions between participants.

See: Accelerating winds of change in global payments

Businesses are  also now presented with the opportunity to plan for and implement new strategies that take advantage of the operational benefits and additional functionality that RTR will introduce. One such example will be the opportunity for participants to have payroll and bonuses deposited immediately into the accounts of employees.

The new payments landscape also gives businesses an opportunity to reconsider their overall customer strategy: how will future efficiencies and functionality around payments impact customer behavior? How can these anticipated behavioral changes be leveraged? What opportunities exist to provide enhanced offerings to customers?

 

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NCFA Jan 2018 resize - How will Canada reinvent its payments framework for a post-pandemic digital reality? The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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