Despite the clear benefits instant payments could bring to human resources software company Employment Hero, the firm isn’t signing up to be among the first to participate in Canada’s new system.

The Australian unicorn, which acquired Toronto’s Humi in March, asks business owners to send money to make payroll three to five days before employees get their cheques, because that’s how long it takes for funds to make their way through the existing financial system. It would be much less of a hassle if that process took seconds instead of days, but vice-president of finance KJ Lee said he’s not convinced it’s worth the time, money and effort it would take to get accredited immediately.

“We’re going to be very, very cautious about sending people’s money, employee payroll, through something that’s not fully tested,” Lee said. It’s too risky to spend the millions of dollars it would take to access a system that could still be years away from launching despite the government’s promises, he said—“It might come, it might not.”

After multiple delays and more than a decade since Ottawa first started laying the groundwork, the Real-Time Rail (RTR) is in its testing phase and could launch in 2026. Payments Canada, a non-profit that operates the country’s payments infrastructure, opened up its membership to fintechs and credit unions last month, a long-awaited and crucial step towards granting them access to the RTR and other payment rails. 

As Payments Canada recruits financial-services businesses to use the RTR, it faces skepticism that it will really launch this time. It must also compete with alternative payment rails that businesses have been using in its absence.

Those alternatives all have tradeoffs, said Dominique Samson, chief operating officer at Flinks, a fintech owned by National Bank that makes open banking and payments software. “It’s a dilemma that everyone in the industry has to grapple with,” he said. “Right now, there’s no perfect solution. The RTR is meant to be the perfect solution.”

The path to that solution has been anything but perfect. As The Logic previously reported, the RTR has been a flashpoint between fintechs, who stand to benefit from the competition and innovation it could unleash, and large banks, who could lose ground to them. Bank executives resisted Payments Canada’s progress on the RTR in the past, although the organization denied that large financial institutions had enough influence to block reforms.

Donna Kinoshita, chief payments officer at Payments Canada, said she’s optimistic the RTR will see plenty of adoption. She said she has been “pleasantly surprised” by the amount of interest fintechs have expressed in the system.

Canada lags more than 100 other countries worldwide with instant payment systems, according to data from Pymnts Intelligence, including the U.S., India and Brazil. Davi Strazza, head of North America at international payments giant Adyen, said five factors must be present for the system to take off: Cost, convenience, security, trust and readiness.

“If those boxes are not checked, you’re going to have challenges,” he said. “You may never have adoption to a point that it becomes a viable alternative to the incumbent methods.”

Viler Lika, CEO of Toronto-based startup SingleKey, which makes software for landlords, said cost could be a barrier to using the RTR. SingleKey currently uses Electronic Funds Transfer (EFT), a payment rail commonly used for bill payments and transactions between businesses. EFT is slow—sometimes taking as long as 10 days to settle—but inexpensive. Payments Canada has yet to say how much using RTR will cost. 

EFTs are “very cheap,” Lika said. “You can do them at scale and not have to worry about the cost.” 

Kinoshita said the RTR’s speed and other features—such as enhanced transaction data and direct connection to bank accounts—will come at “some additional cost,” and that some companies might prefer to keep using EFT if they don’t need those extra capabilities. So long as the volume of payments goes up, costs will go down, she said, adding that eventually, “our vision would be to have it be price competitive with EFT.”

Another barrier is the number of steps companies must complete to access the RTR. All payments companies must register with Canada’s anti-money laundering agency and with the Bank of Canada as payments services providers, two new requirements imposed in recent years, regardless of their plans to use the RTR. To gain full access to instant payments, firms must also apply for membership with Payments Canada, get direct settlement accounts with the Bank of Canada and finally, apply for accreditation. 

Lee said he’s frustrated with the number of hoops companies have to jump through, which increase costs. “In turn, that gets passed on to our customers,” he said.

Kinoshita said she empathizes, and that Payments Canada is doing its best to automate the process. “I’d be lying if I didn’t say right now, ‘It feels like a lot of steps,’ because it is,” she said.

Meanwhile, Flinks is testing a product with a limited set of clients that turns the RTR delays into a business opportunity. Its Guaranteed EFT service fronts payment as a loan while it is being processed, assessing the sender’s transaction history to evaluate the risk that the payment may not clear.

Samson acknowledged that it’s possible the RTR will be a huge success, which could mean fewer customers for Guaranteed EFT. But he also said it might not work well, or be too expensive for most people to use, or continue to face delays.

“In that world, a product like ours will probably remain a more attractive alternative player,” Samson said. From past experience, he said he’s learned it’s best not to wait on Ottawa.