The Retail Payment Activities Act (RPAA) becomes effective on Nov. 1, 2024. This new legislation mandates that payment service providers (PSPs) register with the Bank of Canada by Nov. 15, 2024, a process that entails submitting detailed information about business operations, risk management practices and safeguarding measures for end-user funds.

In the overview below, we outline the steps involved in registration, as well as what PSPs can expect during the post-registration "transition" period.

Registration step-by-step

Prospective applicants should begin by consulting the Bank of Canada's How to complete a registration application: A step-by-step guide. The application process can be summarized as follows:

A diagram detailing PSP application process

1. Create an account in PSP Connect

Begin by creating an account in the PSP Connect web application. This platform will be your primary tool for submitting registration information, updating details, and paying fees to the Bank of Canada. At the time of writing, PSP Connect is not yet live. It is expected to become available when the registration period begins on Nov. 1, 2024.

2. Complete the application form

The application form requires detailed information about the PSP's business structure, payment functions, geographic scope, risk management practices and relationships:

A diagram detailing information about the PSP’s business structureTo complete the application, applicants will also need to submit required documents and pay the registration fee. Gather and upload all necessary documents as specified in the application form. This includes financial information, details about third-party service providers, and any relevant provincial or territorial registrations. In order to submit the application for processing, applicants must pay the one-time, non-refundable registration fee through PSP Connect.

3. Application review and transition period

Between Nov. 1, 2024 and Sept. 7, 2025, the Bank of Canada will review and assess all of the applications it receives. Note that once the application is marked as completed and received, the applicant cannot cancel the application.

During this 10-month "transition period," the Bank:

  • May issue requests for additional information to the applicant
  • Will share applications with the Department of Finance for the purposes of conducting a national security review.
  • Will share applications with the Financial Transactions and Reports Analysis Centre of Canada for the purposes of coordinating between the two regulators.
  • Is prohibited from informing applicants about the outcome of their application. The only exception is where the Minister of Finance issues a directive to the Bank to refuse to register an applicant.
  • Will publish a list of all applicants on its website (exact timing to be determined).

Individuals or entities that currently provide retail payment services in Canada can continue to provide these services during the transition period, but only if they have submitted an application by Nov. 15, 2024. PSPs that operate during the transition period without submitting an application may be subject to enforcement measures under the RPAA.

4. Receive confirmation

After the transition period ends on Sept. 7, 2025, the Bank of Canada will publish a list of registration decisions on its website, including lists of:

  • Registered PSPs; and
  • Individuals or entities that had their registration refused or PSPs that had their registration revoked and the reasons why, including if a PSP has stopped operating.

The RPAA and related regulatory guidance provides opportunities to review or appeal decisions to refuse or revoke a PSP's registration application.

5. Ongoing compliance

Once registered, PSPs are advised to maintain compliance by implementing and maintaining a compliance program, regularly updating the information on file in PSP Connect and adhering to reporting requirements. Registered PSPs may also be required to submit new registration applications in certain circumstances, such as where a PSP is the subject of an acquisition of control. In addition, registered PSPs are required to pay an annual assessment fee to the Bank of Canada.

Taking the necessary steps to comply with the RPAA will not only help avoid potential penalties but also enhance the trust in and security of Canada's retail payment systems.

Read more about the RPAA regime in our article "Canada's Retail Payment Activities Act launches Nov. 1: What Payment Service Providers need to prepare." For more detailed information, contact the authors or a member of our FSxT Group.