What a difference a day makes

Recently, the US, Canada, and Mexico all enacted shorter settlement times for securities trades, moving from two days, implemented in 2017, down to one business day (T+1).  As U.S. Securities and Exchange Commission Chair Gary Gensler says about the move, “time is money and time is risk.”

 This is a great case study in the benefit of faster payments processing, which are not just relevant for securities trades.  When money is involved, the sooner the better for everyone.

According to this PYMNTS report, 32.5% of small businesses experience negative impacts within one or two days of being unable to access funds. The spike from two to three days in impact is considerable. What a difference a day makes!

Faster payments reduce the risk a business faces between goods or services going out and funds coming in. If you are being paid by cheque, for example, the time between a sale and a cleared payment could be days.  

The economy moves at the speed of payments and businesses are a big part of that. At Peloton, we see our customers’ business volume increase by 36% in the first year with us, primarily as a result of faster and easier payments on our platform – higher payment volume. An interesting side note – a Canadian business can pay a US supplier faster than one in Canada, meaning cross border payments currently settle quicker than domestic payments. Knowing the correlation between faster payments and business growth, it’s extremely important for Canada to get on with the modernization of its core payment’s systems.

So, what is Canada doing to improve the pace and keep up with global payments? Here are three faster payment developments on the horizon:

Real-Time Rail (RTR)

Imagine getting good funds in minutes, not days, from the point of sale. In May, while at the Payments Canada SUMMIT, Ron Morrow, Executive Director at the Bank of Canada, re-iterated that RTR will be in industry testing in 2026. Considering the project was initially scheduled for 2019, we are all holding our breath. That said, when it is up and running, we’ll finally be in lock step with the EU, Australia, and both of our southern neighbours, the US & Mexico, and businesses in Canada will have some of the same payment opportunities as their global peers.


How often in a day do you have to give change? In a digital world, maybe there’s a digital solution? While I have my own reservations on cryptocurrency, I can’t deny the Stablecoin space. Companies like Visa and PayPal are both working with USDC to help reduce settlements times, mainly for cross border initiatives. While regulation lags, and Canada gets further behind, the technology of blockchain is made to move fast. Love it or hate it, blockchain based payments seem to be here to stay. The creator of instant millionaires, Bitcoin, started in early 2009,15 years ago now.

Open Banking or Consumer Directed Finance or Open Data?

Whatever we end up calling it, with the right permissions, Canadians will be able to readily share their data between organizations. As a business, you’ll likely have a wider reach to sources of financing and should receive faster adjudication on loan applications. Just this year, Canada laid out it’s open banking framework with hopes to break ground by 2025. If successful we could benefit in accounting, treasury management, lending, and payment settlement times. It only took the UK two years from laying the foundation to consider their APIs stable by late 2020.

Built for Time

Time is one of the reasons I started Peloton Technologies. As a small business owner, I couldn’t believe the amount of time spent “dealing” with payments. It must be done, but  it typically has to be squeezed in between everything else you do to run a successful business.

I set out to eliminate the manual tasks and streamline the repetitive ones. Honestly, as an engineer, I also wanted to spend more time building a great product that I knew firsthand many Canadians needed.

More than a decade later, the Peloton Technologies team embodies that same passion and delivers payment innovations that allow you to focus on all the other areas of your business.

We are here to help you get some time back through faster payments, so get in touch!

About the author

Craig is the Founder and CEO at Peloton where he has not only transformed the payments experience for SMBs, but has continued to play a hands-on role in innovation at the company. Prior to founding Peloton, Craig held senior engineering roles at Sierra Systems (now NTT Data), Visiphor Corporation (now I2 Group) – which supplies software products to the criminal justice system – and BAE Systems, one of Australia’s largest defense contractors. He has also served as senior technology consultant to Quartech, CGI and Deloitte. His background in serving both the public and private sectors, including in defense, has been key to the success of Peloton here in Canada. Craig immigrated from Australia in 2005.