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Accelerating Legal Payments

Canada's payments landscape underwent significant regulatory evolution in 2025, setting the stage for major shifts in 2026. Amendments to the Canadian Payments Act expanded membership in Payments Canada to include supervised payment service providers (PSPs), credit union locals, and others, effective from September 2025. This change, aligned with the Retail Payment Activities Act (RPAA) regime coming fully into force, broadens access to national clearing systems and fosters greater competition and innovation in digital payments.

The federal government has committed to launching Real-Time Rail (RTR) in 2026, a new infrastructure for instant account-to-account transfers. This builds on existing tools like Interac e-Transfer, which saw broadened access for RPAA-regulated PSPs in September 2025 and a shift to flat-fee models for transparency. These developments promise quicker settlement times and reduced reliance on slower traditional methods.

For law firms, these changes arrive amid persistent cash-flow challenges. Many still depend on cheques or manual processes for client payments, leading to delays that can stretch weeks. Trust accounting rules remain strict—funds for legal services must go into designated accounts—but the ability to accept credit/debit cards, e-Transfers, or online payments directly has grown more feasible and attractive. Some provinces, like British Columbia, implemented Trust Administration Fee (TAF) adjustments effective January 1, 2026, charging $20 per matter only when trust deposits exceed $10,000, easing burdens on smaller transactions but still requiring precise tracking.

A key tension lies in balancing speed with compliance and cost. While surcharging (passing on card fees to clients) is now permitted in some cases under updated card network rules, law societies impose guardrails to ensure ethical handling of disbursements and avoid improper use of trust accounts. Firms risk slower collections or lost clients if they lag behind client expectations for modern, convenient options like instant transfers or installment plans.

The stakes are financial and operational. Delayed payments exacerbate cash-flow crunches for small and mid-sized firms operating on thin margins, where outstanding receivables can represent significant tied-up capital. Inaction exposes practices to competitive pressure from tech-forward firms and potential inefficiencies as real-time capabilities become standard across sectors.