Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
PSPs Now Under Bank of Canada Supervision
Payments Regulation | Sep 8, 2025
Retail Payments Activities Act Supervision Begins Today
Today, September 8 2025 the Bank of Canada begins supervising payment service providers (PSPs) under the Retail Payment Activities Act (RPAA). It's the official start of Canada’s new oversight regime for retail payments. According to the Bank of Canada close to 1500 PSPs have applied for registration and those on the Applicant list are now legally required to comply with RPAA obligations.
Registry and Compliance
Applicant PSPs must keep information current on PSP Connect and respond promptly to information requests from the Bank. These reporting duties now carry legal weight. The Bank has confirmed that it has the authority to deploy enforcement tools where necessary to ensure compliance and maintain the stability of Canada’s retail payments system.
See: Bank of Canada Warns PSPs Enforcement Coming
The Bank will also update the Registry of PSPs on a rolling basis. This depends on the Department of Finance completing national security screenings and providing cleared names to the Bank. For applicants this means Registry inclusion will be phased over time rather than immediate.
Trust Tax Issue and Supervision Fees
The Bank also raised the ongoing tax issue linked to trust arrangements in a separate Letter to Industry. Some PSPs that keep interest earned on customer funds could face extra tax steps, like having to issue tax slips to customers. The Bank said it understands that PSPs may not yet be able to fully meet trust rules because of this and will accept proof that they are taking reasonable steps in the meantime.
The Bank also confirmed that PSPs will be charged supervision fees once the cost recovery rules are finalized. This will add another compliance cost when it comes into effect.
Conclusion
For fintech and payment firms in Canada the start of RPAA supervision is a major step. Compliance and reporting are now legal requirements and the Bank has the power to enforce them.
See: Banks Retreat From Payments as Moneris Sale Looms
The phased Registry rollout highlights the national security checks that must be completed, while the temporary relief on the trust tax issue shows regulators are trying to be practical during the transition.
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