Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Bank Of Canada Publishes Nine RPAA Enforcement Notices
August 26, 2026 | NCFA Insight | Regulation And Policy, Risk Compliance And Regtech, Payments And Money Movement
Nine Registration Violations, $0 Penalties And New PSP Obligations
As of August 26, 2026, the Bank of Canada's RPAA enforcement decisions show nine published notices of violation involving payment service providers. Every listed notice cites section 23 of the Retail Payment Activities Act for performing retail payment activities without being registered. Every one also carries a $0 administrative monetary penalty.
Operating without registration is classified as a very serious violation. A zero dollar penalty doesn't make the violation informal or erase it. The decisions remain public for five years, and violations are also reflected on provider registry entries.
The transition period is over. Payment firms applying after September 8, 2025 must be registered before they begin regulated activity. A firm already operating without having applied is violating the Act. The requirement can also reach foreign providers serving Canadian users, so regulatory status in another country isn't a substitute for Canadian registration.
For firms still assessing scope, the Bank of Canada PSP registration guide covers the payment functions, Canadian market activity and operating models that can bring a business under the regime.
Nine RPAA Notices All Concern Unregistered Activity
The Bank can set penalties for very serious violations as high as $10 million. Its RPAA monetary penalty policy considers actual and potential harm, previous violations, intent, negligence and other facts around the case.
Several of the published registration decisions say the provider later applied and took steps that reduced potential harm. That gives payment companies useful insight without creating a safe harbour. Fixing a problem quickly may affect the financial outcome, but it doesn't undo the underlying breach or guarantee another provider will receive a $0 penalty.
The UK based payment company, Equals Money PLC, challenged its notice and asked the Bank to replace it with a warning. The prescribed review maintained both the formal violation and the $0 penalty.
$0 Penalties Still Leave A Public Enforcement Record
For founders, compliance teams, investors and commercial partners, the cost can extend beyond the fine. A public violation can become part of bank onboarding, enterprise procurement, investor due diligence and future supervisory decisions.
The Bank keeps enforcement decisions on its website for five years, while published violations also appear on provider registry entries. A firm that fixes a registration problem may therefore avoid a financial penalty and still carry a visible compliance record.
RPAA Enforcement Now Covers Safeguarding And Reporting
The nine notices make registration the first repeated enforcement pattern, but the Bank is already using other powers. On February 17, it ordered XTM Inc. and its affiliates to stop retail payment activity after raising serious concerns about XTM safeguarding client funds. Ten days later, a revised order allowed limited activity under court appointed monitoring and specified conditions.
Reporting can also trigger enforcement. A June 29 Bank of Canada RPAA reporting reminder says material incidents must be reported without delay and no later than 48 hours after they are determined to be material. Significant operational changes or new payment activities generally require at least five business days of advance notice, while annual reports are due by March 31.
That adds more weight behind the Bank of Canada PSP supervision regime that began in September 2025. Registration gets a provider through the front door. Staying compliant means managing operational risk, protecting customer funds, reporting changes and incidents, and overseeing third parties that support payment activity.
RPAA Compliance Now Affects Payment Market Access
Canada's financial infrastructure is opening at the same time that RPAA supervision is becoming more active. The Canada Real Time Rail access guide covers the rules that came into force on August 24, 2026, ahead of the planned Q4 launch. Eligible payment service providers can pursue Payments Canada membership and new participation routes, but registration alone doesn't provide access.
A provider still needs more than registration. It may need Payments Canada membership, settlement arrangements, technical connections, fraud controls and testing before it can use the new infrastructure.
For fintechs, that means compliance is becoming part of product readiness. Companies building instant payments, treasury services or embedded payments need the regulatory and operating pieces in place before they can compete on the new rails.
The proposed Canada Consumer Driven Banking rules include a defined accreditation route for RPAA registered payment service providers. That gives payment firms a commercial reason to get registration and operating controls right. The same regulatory foundation can affect whether a provider is positioned to compete in real time payments, data sharing and future payment initiation.
The first published enforcement cases give payment firms a clearer picture of how the regime works:
- Registration is being enforced
- Safeguarding concerns can stop operations
- Reporting deadlines have consequences
- Firms that meet those obligations are also better positioned to compete as Canada opens access to new payment and data infrastructure
Talking Point
As Canada opens Real Time Rail access and builds Consumer Driven Banking, will strong RPAA compliance become more than a regulatory requirement and help determine which payment firms are ready to compete on the new infrastructure?
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