Wealthsimple Approved as First Fintech Start-up to Access Upcoming Real-Time-Rail Payment System
The Bank of Canada has approved Wealthsimple as the first non-bank, non-credit union to have access to a direct settlement account. The use of a direct settlement account will allow Wealthsimple to settle payments directly rather than needing a third-party financial institution as an intermediary. This system will give Wealthsimple access to a much faster national payment system that is in the works: the upcoming real-time-rail payment system.
As noted by Michael Katchen, CEO of Wealth simple, this is “a huge milestone for the company and for the industry as it gives the company a seat in the regulatory space among the incumbents.” This approval is expected to change the financial services landscape in Canada. Wealthsimple will be able to use this new platform to boost innovation and competition in the financial industry. The real-time-rail system will enable Wealthsimple to roll out several new options including instant wage and bill payments as well as better payment options for merchants.
Start-ups in the fintech space have been waiting for the arrival of real-time-rail and have called it a necessary development for the financial services space in Canada. Unfortunately, it is unclear when all of this will begin as Payments Canada announced on October 11 that the launch of the real-time-rail payment system has been delayed due to the need for more time to validate and test the system’s components and end-to-end integration.
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