Wealthsimple has become the first non-bank or credit union to be approved by the Bank of Canada for a direct settlement account.

This means that the FinTech startup will not have to rely on a banking partner to process transactions when Real-Time Rail (RTR) launches in Canada, as it will have direct access.

“Approval is monumental for our business but beyond that, will change the landscape of financial services in Canada,” wrote Wealthsimple CEO Michael Katchen. “This decision helps level the playing field with incumbents.”

“It means we’ll be able to keep innovating and delivering on projects we have long imagined will improve the everyday lives of the over 2.5 million Canadians we serve today. Things like instant wage disbursement and instant bill pay.”

FinTech startups have long awaited the arrival of RTR, calling it a necessary development for financial services innovation and competition in the country. However, last week it was revealed that Payments Canada has delayed the launch of the forthcoming RTR payment system, saying it needs more time to validate and test the system’s components and end-to-end integration.

Industry stakeholders that BetaKit spoke with called the delay “disappointing” but also “not a surprise.”

In anticipation of the new system, Wealthsimple had applied for a settlement account with the Bank of Canada. Regarding the decision, Katchen wrote in a LinkedIn post: “When we look to our peers in the UK, the Central Bank made the decision to allow non-bank payment companies direct access to the payment system, resulting in an explosion of fintech services. They saw a new generation of challenger banks rise up offering better and more affordable products, like transformative international money transfer services. It forced dominant incumbents to make their service offerings more competitive, and gave consumers access to more choice and lower fees.”

Announcing the Bank of Canada approval, Katchen added that Wealthsimple is “ready to do our part to bring the Real-Time-Rail payment system to Canadians as soon as possible.”

Developing…

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