23/09/25
As of September 8, 2025, the Bank of Canada commenced publishing a registry of registered Payment Service Providers (PSPs) under the Retail Payment Activities Act (RPAA), marking a significant milestone in the regulation of retail payment services in Canada.
📜 Regulatory Framework
The RPAA, which came into force on November 1, 2024, mandates that all PSPs performing retail payment activities must register with the Bank of Canada. This includes both domestic and foreign entities that direct retail payment activities at individuals or entities in Canada. The registration process involves submitting an application and paying a non-refundable fee of $2,500. Failure to register before commencing retail payment activities is considered a serious violation and may result in substantial administrative penalties.
⚖️ Comparative Analysis
The RPAA aligns with international regulatory standards by requiring PSPs to implement strong risk management frameworks and safeguard end-user funds. This approach is consistent with practices in jurisdictions such as the European Union and the United Kingdom, where similar regulations have been established to enhance consumer protection and financial system stability. However, the RPAA introduces unique provisions, such as the requirement for foreign PSPs to designate an agent or mandatary within Canada, ensuring effective regulatory oversight.
🏦 Practical Implications
PSPs that hold end-user funds must implement measures to safeguard these funds, as outlined in the RPAA. For instance, if a PSP receives funds with concurrent instructions for immediate transfer, those funds are not considered “held” and are not subject to safeguarding requirements. Conversely, funds kept at rest and available for future withdrawal or transfer are deemed “held” and must be safeguarded accordingly. Entities operating in sectors such as remittances, payroll services, or lending should consult the Bank of Canada’s case scenarios to determine their obligations under the RPAA.
📞 Conclusion
The implementation of the RPAA represents a significant step in enhancing the safety and reliability of retail payment services in Canada. PSPs must ensure compliance with the registration requirements and safeguarding obligations to avoid potential penalties. For tailored legal advice and assistance in navigating the registration process, contact NUR Legal. Visit us at NUR-Legal.com or contact us directly at info@nur-legal.com
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Emil Korpinen