In this episode, we discuss why the Real-Time Rail is the future of financial transactions and will transform the way Canadians pay, send, and receive money. We explore why there is a significant need for Real-Time Rail in Canada and how it will impact individuals, businesses, and the overall financial landscape in the country.

Guest: Brigit Carroll, Senior Policy Lead & Campaigns Manager for the Americas at Wise

The Simplify Payments Podcast, presented by Paramount Commerce, is a podcast series that takes a closer look at new and emerging financial technologies and practices with some amazing industry experts.

Please like, comment, and share this video. Also, stay up to date with our content by subscribing to our YouTube channel.

Full episode transcript:

Varad Mehta: Hello everyone, and welcome to the Simplify Payments podcast presented by Paramount Commerce. I’m your host, Varad Mehta. And in Simplify Payments, we explore new and emerging financial technologies and practises with some amazing industry experts. In the fourth episode, we’ll explore how the real-time rail will transform the way Canadians pay, send, and receive money. Our expert for today is Brigit Carroll, Senior Policy Lead and Campaign Manager for the Americas for Wise. So please sit back and enjoy the show. Okay, Brigit. So how we begin this podcast, as always, is by asking you a few fun questions. So my first fun question is, if I were to visit Brussels, would you recommend me having the mussels or a nice Waffle?

Brigit Carroll: I can’t choose between the two. Both, for sure.

VM: Both, for sure?

BC: Yeah.

VM: What’s more popular there? It seems like mussels are a really big thing down there.

BC: Yes, but you have to eat it in the right month. What they say it’s the month’s ending in “ber”, so September, October, November, December, I guess. I guess rest of the year, I would say Waffle. But yeah, and everything there is good. The fries as well.

VM: Okay. Can’t go wrong with Waffles. My second question is, I saw that you’re bilingual, multilingual, if I’m not mistaken. Do you think in English or do you think in French?

BC: I spoke in French since I was five years old. I went to a French aversion school. I do think in French, not when I’m working in English, let’s say. But I’ve definitely had dreams in French, which I think if you’re not at a certain level, you’re probably not doing that. So it’s fun. I love…I think language and culture is so interesting.

VM: That’s so fascinating. And then two more questions. So what’s the best place to go to if I wanted a really good view of the Mississippi River?

BC: Oh, of the Mississippi River. I guess River Road between Minneapolis and Saint Paul.

VM: Yeah. Thank God. My research paid off.

BC: You’re like hoping.

VM: I hope…okay.

BC: That would be bad if I didn’t know the answer that being from Minneapolis.

VM: Can you imagine if I got it wrong? It’s like, did I look up the correct person? But no. Okay, cool. River Road is what Brigit mentioned. So yes, River Road.

BC: You should have asked about best view of Lake Superior because it could be in Minnesota or Canada.

VM: There we go. More research next time. I’ll keep that in mind. And last question is, I noticed that your university is really close to the Mall of America. Have you been to the Mall of America?

BC: Too many times. More than I wish that I have been. When it’s too cold, and I’m sure Canadians have this too, we go to the Mall to walk sometimes to do the laps. That’s how big it is.

VM: Okay, there we go. Malls being used for exercise. I love this. Okay. Now, just moving on to the topic of discussion. We want to talk about real-time rails and then potentially making their way into Canada in the next few years. And Brigit, you’re an expert within this. And I’d like to, first of all, ask you that recently in the news, it was said that Payments Canada has announced that there’s going to be industry testing for the real-time rail starting in about 2026. So why is just getting this timeline so important for this payment rail?

BC: So there have been several delays with the real-time rail, and we won’t focus on that because I think we’re really excited to see actual timeline set, and it’s really important because if we don’t have a timeline, we’re not going to stick to it. The industry, especially, I think, fintechs, have been keen to see this come up and ready and serve Canadians. And so this is just part of really the broader Canadian government’s plans to modernise the payment system, and real-time rail will be a key part of that. We believe sending money should be instant, convenient, transparent, affordable, instant is a key part of that. And so while over 60% of WISE’s payments around the world are already instant, so we consider that less than 20 seconds, we can get that number higher the more real-time rails that we have around the world. So we’re really excited to see that come to life, but also, hopefully, access it as a payments company.

VM: No, definitely. And I’m assuming you must have also looked at other markets where open banking exists. Could you tell me why within Canada, the introduction of the real-time rail is so important, not only for maybe…For both, for maybe the financial landscape as well as consumers, and even from your perspective, why is it important for companies such as WISE?

BC: It’s funny when I was living in Europe and then I moved back to the US, I got really used to fast payments. You pay your rent with an instant payment. And I moved back to the US and I realised that wasn’t the case. And I think that’s probably a similar experience if you move back to Canada. And it’s incredible how it becomes the norm and that ease and convenience is hugely beneficial for consumers. I think one of the number one questions we get asked at WISE is, where is my money? So especially when you send money cross-border, that can be really worrying, stressful to know, when is my payment going to get there? And what we see is that when payments are instant, customer satisfaction doubles. So there’s a really clear benefit for everyday Canadians with getting this live. We also hear from Canadian customers who have to drive hours and hours across their province to go to a bank branch to send a cross-border payment at a very high cost. But then also that payment takes days to come through on the other side. And it just doesn’t have to be that way. So with real-time rail, this will help new Canadians who send money cross-border, also small businesses. Obviously, in a trading economy, that’s really key, getting money to the US or other places faster. So it’s unlocking instant liquidity and things like that. So there are a lot of benefits that I think will come through thanks to the real-time rail.

VM: And like going further on that point, how do you think it compares to other payment rails that already exist? You can talk about the States or even potentially Canada. If you could give us an example and just see the comparison between both.

BC: Yeah. So I would take the UK as a stellar example, and then the US is maybe a more recent one. So the UK launched their faster payment system years ago, and actually, WISE was one of the first non-banks to connect directly to that scheme in 2018. And that’s so six years ago now. When we did that, we were able to immediately lower the cost for those customers by 20% and increase the speed of payments from about 15 minutes to less than 20 seconds. So again, you can see the real benefit that people were able to see after we gained that access. The US, we’ve seen FedNow, so the equivalent of the real-time rail in the US, come live. Granted, it’s only limited to banks and traditional depository institutions. So in terms of uptake, I think now it’s a different landscape, right? There are a huge amount of banks and credit unions across the US, more than 10,000, I believe. So getting that number of uptake will be quite difficult. I think in Canada, there’s a bigger opportunity in terms of, it’s a little bit more of a concentrated market in terms of the big five or six Canadian banks, and then a growing fintech ecosystem. So hopefully, when the real-time rail goes live, there’ll be room to really drive uptake quickly. And with the government’s move to open up access to the system to registered payment service providers, so regulated payments firms, that will also drive uptake. Because what we saw was that in the UK, for example, when they opened up access to fintechs, the number of participants in the real-time rail doubled. It’s basically driving competition, because if you’re at one bank and you can get fast payments, other customers want that as well. And so it really is a virtuous cycle, and I think we’ll hopefully see that happen in Canada.

VM: That’s awesome. And yeah, I think one story that was really popular when we spoke about fintechs in Canada, plus the real-time rail is the Wealthsimple story that they became the first fintech to gain early access to the RTR. I believe, when 2026 or 2027, when it’s out there, they’ll be the first fintech to have that. So can you tell us why this early accessis important and why, in general, it’s important for fintechs in Canada?

BC: Yeah. So it’s really encouraging to see a player like Wealthsimple integrating into the payment system. They’ve been at the forefront, I think, in terms of fintech innovation in Canada, and certainly like like-minded, I would say organisation compared to WISE. So early access, one, I think it’ll just help them test and give feedback as an innovative and tech-driven company. And also two, driving competition and choice. So like I said, with the UK example, that is going to spur the big banks to think about using the real-time rail as well. So I think it’s a good thing. It’ll lead to more diverse options, more choice for Canadians. And we’re hoping eventually to join the system as well. So, yeah, looking forward to seeing how that all plays out. But the industry testing phase will be very important

VM: And my last question would be, I know you’ve been doing the rounds in Canada, talking about RTR and all that stuff. You’ve been a big advocate. So what do you think the next steps or the future is? What is going to happen? You mentioned that there’s going to be great competition. Do you foresee more innovation coming into this space because of this? Instant payments for consumers is going to be a great thing. Things, especially where more new industries are coming in, like iGaming, sports betting. What do you think is next? Then what do you think it’s going to happen overall when it does get introduced in a couple of years?

BC: I think, gosh…

VM: Big question, so sorry.

BC: Yeah, it’s a really big question. No, I think it’s all really exciting. And I’m curious to see with the combination of open banking coming to Canada plus the real-time rail, how those interact. Because I think open banking also can introduce…We often think about it like giving consumers power over their data, right? But it can also be a tool for comparison shopping and making data public so that, for example, you could go to an aggregator or a comparison website that would show you all the cross-border payments options you have, and you could compare and contrast fees in a really transparent way. I think that’s what really excites me. I think the other thing is this conversation about junk fees and especially in this affordability crisis, is not going to go away. We’ve seen that in the US. I also think I’ve seen similar other narratives in Canada. So I’m curious to see, of course, with my political hat on, going into 2025, what will happen there? Obviously, WISE is laser-focused on bringing transparency into the market. I think the momentum is going one way, and that’s toward empowering consumers. So whether that’s demanding more speed, whether that’s demanding lower fees, more transparency, more convenience, I think it’s only going to go in that direction. So excited to see it.

VM: Perfect. So thank you so much, Brigit for joining us. This is one of those topics that you want to punch in, get the meatiest content out there. And I think I hope we did that with this episode. And that’s the main focus because this has been a topic that has been discussed over the years. And now that there’s some good news out there, it’s good for people to get a refresher on the topic of real-time rail, and especially from amazing experts such as yourself. So thank you so much for this. And if I do visit the Mall of America or Brussels, I am going to keep your advice in mind. So exercise and mussels in the “ber” ending months.

BC: Absolutely. Thank you so much for having me.

VM: Thank you. That is our episode for today. I want to thank Brigit Carroll, Senior Policy Lead and Campaign Manager for the Americas, at WISE for joining us today and explaining the significance of the real-time rail. If you have any questions for us or Brigit, please do comment them down below. Please don’t forget to like, share, and subscribe to our YouTube channel. For more amazing content, please visit paramountcommerce.com Thank you so much for tuning in to the Simplify Payments podcast presented by Paramount Commerce. I’m your host, Varad Mehta, and I’ll see you soon.