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Will Payments made Online at your bank now be Real-Time?
June 9, 2024
10:02 am
Lodown
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Payments in Canada use the Automated Clearing Settlement System (ACSS) managed by Payments Canada. Since May 28, 2024, we have a T+1 settlement cycle for most trades in securities. So what about online Bill payments made through banks. Are these now, or soon to be, real time? This website alludes to it.

https://www.synpulse.com/en/insights/the-future-is-now-real-time-payments-in-canadas-financial-sphere

Edit: Many consumer benefits to RTP but it seems Canada will delay and delay and....
https://www.forbes.com/sites/rociowu/2023/04/20/there-are-gaps-in-the-us-real-time-payment-system-who-will-fill-them/

June 9, 2024
11:32 am
NorthernRaven
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This Payments Canada "Q3 2023 Delivery Roadmap" doesn't really say much, and there never seemed to be the promised "Q1 2024" update. I wouldn't expect anything anytime soon. There's going to be a lot of technical stuff that has be designed to work right, and I'm sure the banks, existing card and payment networks and new fintech people are all fighting over turf and disruption.

June 10, 2024
10:45 am
Norman1
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There is an update April 16 at Canada's Real-Time Rail program resumes with renewed momentum:

… said Jude Pinto, Co-CEO (Interim) and Chief Delivery Officer, Payments Canada. “The last component of the RTR, the clearing and settlement build, will continue through 2024 prior to initiating testing of the new system through 2025 and into industry testing in 2026. We know the ecosystem is anticipating the launch of the RTR, and we will have further details to share in the coming months.” …

I see little justification in real-time rail for bill payments. Doesn't matter to utilities and other billers if the bill payment shows up next morning instead of in 10 seconds.

June 18, 2024
7:56 pm
Lodown
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Norman1 said
I see little justification in real-time rail for bill payments. Doesn't matter to utilities and other billers if the bill payment shows up next morning instead of in 10 seconds.  

The RtR benefits, w.r.t. bill payments, flows to the customers by eliminating uncertainty of payment. Payments will arrive even if made at the last minute. This avoids late fees and such. That is the reason why RtR has been delayed for so long, with no end in sight. The banks and billers like their fees way too much.

June 18, 2024
9:04 pm
AltaRed
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So don't wait until the last minute. Before I automated the paying of bills with pre-authorized credit or PAD, I'd schedule Bill Payments at least 2 business days in advance. There is no logical reason not to do that.

June 20, 2024
12:03 pm
RetirEd
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AltaRed: some stressed people have to wait for paycheques or pension remittances, and for them those delays matter.

RetirEd

June 20, 2024
1:57 pm
AltaRed
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RetirEd said
AltaRed: some stressed people have to wait for paycheques or pension remittances, and for them those delays matter.  

To that, I respond....exercise better cash flow management. However, for what it is worth, pre-authorized debit or credit works perfect because the vendor doesn't draw on it until the actual bill payment date and the payment does not typically get posted in one's bank account until the next day. There is no particular reason to use manually executed Bill Payment for most payments. I do agree there are some vendors I would not give pre-authorization too, but they are few and far between.

June 23, 2024
6:00 am
RetirEd
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AltaRed: We here certainly can exercise good cash-flow management, but a large proportion of typical bank customers run right on the edge and can't. And they can't risk high error penalties that cascade as the bounces trigger more and more.

Even if cash isn't transferred immediately, bank systems won't allow payments to be ordered (even pre-authorized ones) if the cash isn't there.

If we move to more real-time transfers, it will get worse.

RetirEd

June 23, 2024
7:05 am
AltaRed
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Nothing stops us from automating, either through pre-authorized debit (or credit), or scheduled Bill Payments, as many of these payments as we like. It is true the bills won't get paid if the cash is not there, but that means a late payment fee regardless of whether the automated payment does not occur, or we are late with a manually initiated Bill Payment. What I am saying is automation takes care of the concern about lack of real-time bill paying because the withdrawal by the vendor does not happen until the date the payment is due anyway.

This thread was about the concern that Bill Payments are not real time yet and thus being late with payment. It makes no difference one way or the other as the bill must be paid in time to avoid charges.

June 23, 2024
3:37 pm
Norman1
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Lodown said

The RtR benefits, w.r.t. bill payments, flows to the customers by eliminating uncertainty of payment. Payments will arrive even if made at the last minute. This avoids late fees and such. That is the reason why RtR has been delayed for so long, with no end in sight. The banks and billers like their fees way too much.

The real-time rail requirements apply only to the financial institutions. There are no requirements for recipients to handle the payments in real time.

There's also no requirement for billers, like utilities, to accept real-time payments and absorb any interchange involved. For example, in Argentina, the receiving financial institutions can charge beneficiaries an interchange up to 0.8% for receiving real-time payments: International Bar Association (May 2021): Argentina develops a new real-time payment scheme.

June 23, 2024
8:07 pm
everhopeful
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I do not believe we will see any more rapid bill payments than we currently have, unless the banks are regulated to do so in the future. The benefits to the consumer are many, but the banks are all too happy to keep collecting late fees and interest from those who just missed paying their bill on time. There is no motivation for them to discontinue their predatory tactics to those with low income or poor budgeting.

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