On April 25, 2024, we highlighted the potential obligations a payment service provider (“PSP”) may have under Canada’s Retail Payment Activities Act (the “RPAA”), including submitting a registration application with the Bank of Canada (the “BoC”) during the period between November 1, 2024 to November 15, 2024 (the “Registration Period”). With the Registration Period quickly approaching, the following is key information pertaining to registration for any individual or entity who may be deemed a PSP and fall under the scope of the RPAA.\n

Who needs to register?

\nUnder the RPAA, PSPs must register with the BoC before conducting any retail payment activities. An individual or entity may be required to register if they:\n

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  1. Perform one or more of the following:\n
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    1. Providing or maintaining an account on behalf of an end user;

      2. \n

    2. Holding funds on behalf of an end user;

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    3. Initiating electronic funds transfers for an end user;

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    4. Authorizing or facilitating electronic funds transfers, including processing instructions; or

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    5. Providing or clearing settlement services.

      6. \n

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    2. \n

  2. Perform a retail payment activity, defined as a payment function in relation to an electronic funds transfer.

    3. \n

  3. Perform retail payment activities within Canada, either by operating in Canada or abroad.

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  4. Do not fall within the scope of any entity-based or activity-based exclusions under the RPAA, including but not limited to:\n
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    1. Exempt entities: Banks, authorized foreign banks and provincially-regulated trust companies; or

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    2. Exempt activities: Incidental activities, securities-related transactions and internal transactions.

      3. \n

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    5. \n

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When do I register?

\nThe BoC has provided for a transition period from November 1, 2024 until September 7, 2025 (the “Transition Period”) for existing PSPs to apply for registration and for the BoC to process applications. As stated above, existing PSPs must submit a registration application within the Registration Period. Once a registration application has been submitted within the Registration Period, PSPs may continue performing retail payment services during the Transition Period. For individuals or entities wishing to begin operating as a PSP following the conclusion of the Registration Period, a registration application must be submitted at least 60 days before they plan to begin performing retail payment activities.\n

Why should I register?

\nAny PSP operating during the Transition Period that has not submitted a registration application may be in contravention of section 104 of the RPAA. In such an event, the contravening party may be served with a notice of violation and be assessed an administrative monetary penalty. A contravening party served with a notice of violation will be made public on the BoC’s website, along with the nature of the violation and any monetary penalty assessed.\n

When will registration decisions be released?

\nThe BoC will inform applicants of their registration decision following the conclusion of the Transition Period.\n

Will registrations be made public?

\nWhile no license will be provided to PSPs that have successfully registered with the BoC,  the BoC intends to maintain a public registry of all registered PSPs.\n

Need assistance?

\nShould you have any questions or concerns in relation to the application process, please reach out to a member of the Miller Thomson Structured Finance and Securitization group.