Retail payments supervision

Learn about the Bank of Canada's role in supervising payment service providers, next steps and how you can get involved.

Under the Retail Payment Activities Act, the Bank of Canada will be responsible for supervising payment service providers. The aim is to build confidence in the safety and reliability of their services while protecting end users from specific risks.

The Department of Finance Canada is leading the development of regulations for this supervisory framework with support from the Bank.

About payment service providers

Payment functions

According to the RPAA, payment service providers may include a variety of entities that perform electronic payment functions, such as payment processors, digital wallets, money transfer services and other payment technology companies that offer any of these services:

Providing or maintaining a payment account

Individuals or entities provide or maintain a payment account if they store personal or financial information about end users to make it easier to carry out future transactions.

Individuals or entities do not perform this function if the information is stored:

  • for purposes other than making an electronic funds transfer (EFT)
  • for making it easier to conduct a one-time transaction but not for future EFTs

Holding funds

Work to interpret this function is ongoing and more information will be released when it becomes available.

Initiating an electronic funds transfer

An EFT is initiated when a payer or a payee sends the first instruction to start a transaction, either as a push or pull payment.

  • A push payment is an instruction sent by the payer to move funds to the payee’s account. This type of payment is commonly used for a one-time online purchase or a transfer of funds that occurs only once.
  • A pull payment is an instruction sent by the payee to move funds from the payer’s account. This type of payment is commonly used for recurring bills and subscriptions.

Both push and pull payments require the payer’s consent.

Authorizing or transmitting instructions about an electronic funds transfer

A payment service provider authorizes an EFT if it:

  • requests the end‑user to confirm that they sent or received an EFT
  • confirms that the end‑user has enough funds to make the requested EFT
  • has an arrangement with its end‑user to send or receive an EFT without an action taken by the end user (i.e., pre-authorized)
  • debits or credits an end‑user’s account as directed by the payment instruction associated with an EFT

A payment service provider transmits, receives or facilitates an instruction about an EFT if it:

  • sends payment instructions
  • receives payment instructions
  • provides the infrastructure that enables payment instructions to be sent or received

Clearing or settling

The clearing process involves transmitting, reconciling and, in some cases, confirming transactions before they are settled. Clearing includes preparing and calculating final balances for settlement as well as exchanging the necessary information.

The settlement process releases the payment obligations between two or more payment service providers according to the terms of the transaction. The transaction is considered complete once settlement takes place.

Money service businesses

Entities registered as a money service business need to register with the Bank as a payment service provider if they perform retail payment activities captured by the RPAA.

The Bank’s role is to supervise registered entities in relation to operational and financial risks to ensure the safety and the reliability of the payment service providers.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) will continue to regulate money service businesses in relation to:

  • anti-money laundering
  • anti-terrorist financing

About the supervisory framework

In accordance with the RPAA, the Bank is developing a framework for retail payments supervision. The Bank will promote compliance by ensuring that payment service providers meet the following requirements under the RPAA:

A payment service provider will also need to pay a registration fee when submitting an application. Once registered, it will be required to pay an annual assessment fee to recover expenses related to the Bank’s supervisory role. The Department of Finance Canada will lead consultations to develop regulations on the amount of these fees and how they will be calculated.


Payment service providers who meet the following four criteria will need to register with the Bank.

Criteria for registration

Must be a payment service provider

  • Perform one or more payment functions as a service or business activity that is not incidental to another service or business activity. “Incidental retail payment activities” will be defined in guidance documents.

Must perform a retail payment activity

  • Perform payment functions related to an EFT made in Canadian or foreign currencies (excluding cryptocurrencies).

Must meet certain geographic scope

  • Have a place of business in Canada
  • Have a place of business outside of Canada but perform retail payment activities for an end user in Canada and direct retail payment activities to individuals or entities in Canada

Must not be excluded from the application of the RPAA and associated regulations

  • Entities excluded under the RPAA include:
    • banks and authorized foreign banks (pursuant to the Bank Act)
    • credit unions, insurance companies, and trust and loan companies
    • provinces or their agents and mandataries
    • Payments Canada
  • Activities excluded under the RPAA include:
    • transactions using automated banking machines
    • internal transactions among affiliated entities
Payment service providers still need to register if they perform other retail payment services that fall under the RPAA.

Transition period for registration

The RPAA includes a transition period for individuals or entities to apply for registration with the Bank, and for the Bank to process applications. Individuals or entities that currently provide retail payment services can continue to provide these services during the transition period, but only if they submit an application.

The RPAA prohibits the Bank from informing applicants about the outcome of their application during the transition period. Registration decisions will only be published once the transition period is over.

The Bank will maintain a public list of all registered payment service providers and a list of those whose registration has been refused or revoked.

For more information on which entities will need to register with the Bank, see the September 2021 Retail Payments Advisory Committee (RPAC) consultation document.

Mitigating operational risk

A payment service provider will need to show that it has a framework in place to manage risk and respond to incidents. It must also report any incident that could have a significant impact on end users, other payment service providers or clearing and settlement systems.

Safeguarding end-user funds

To protect end-user funds and give users reliable access to their funds, a payment service provider will be expected to keep end-user funds separate from other money used in its business operations.


To demonstrate compliance with the RPAA, a payment service provider will be required to:

  • submit an annual report
  • notify the Bank before making a significant change in the way it performs a retail payment activity
  • provide other regulatory information

What the Bank won’t do

The Bank will not supervise financial businesses or payment systems that are prudentially regulated by federal or provincial laws, such as commercial banks and credit unions.

The Bank will not offer broader consumer protection, such as:

  • dispute resolution between a payment service provider and its end users
  • concerns about fees charged by payment service providers
  • privacy complaints

The Bank’s role is not geared toward preventing payment service providers from failure or insolvency. Unlike a licensing program, this supervisory framework will not enable the Bank to authorize firms to operate as a particular type of entity.

Canada’s Minister of Finance will be responsible for conducting a national security review of payment service providers.

Key milestones

Here is what to expect as the retail payments supervisory framework is developed.


1. Legislation

The RPAA establishes the legal framework for the Bank to supervise retail payment providers, including its scope and powers. It was approved by Parliament on June 29, 2021, and is expected to come into force in stages, as described below.

In progress

2. Regulations

Regulations to help clarify the details of the legislation will support the RPAA. Regulations, like legislation, have the force of law.

  • Drafting: While the Department of Finance Canada drafts regulations, the Bank will engage with stakeholders and provide technical expertise and advice as required.
  • Approving: The Department of Finance Canada will submit the regulations to the Treasury Board—the committee of ministers that oversees the Government of Canada’s spending and operations—for approval.
  • Publishing: Regulations will be published for public comment in Part 1 of the Canada Gazette.
  • Reviewing and republishing: The Treasury Board will review comments and consider changes to the regulations, if needed. A final version of the regulations will then be published in Part 2 of the Canada Gazette.
The feedback that the Bank receives from the consultations on the various aspects of its supervisory role will help shape the Bank’s advice to officials at the Department of Finance Canada as they draft regulations.

3. Guidance

Once regulations are published in the Canada Gazette, Part 2, the Bank will issue guidance on specific topics related to the RPAA to further clarify its supervisory expectations. These documents will:

  • explain how the Bank interprets the RPAA
  • provide transparency around the Bank’s supervisory role

4. Coming into force

Payment service providers will be required to register with the Bank before they have to comply with requirements for operational risk management and safeguarding end-user funds.

The federal cabinet will decide how and when each provision of the RPAA will come into force.

How to get involved

Here is how the Bank is engaging with industry and stakeholders to better understand the retail payment landscape.


The Bank is consulting with stakeholders to get their feedback on various aspects of its supervisory role and to understand how this new regulatory work will impact payment service providers.

For information about our next consultation and how to participate, subscribe to the Retail Payments Supervision newsletter.

Retail Payments Advisory Committee

The Retail Payments Advisory Committee (RPAC) was established in 2020 to provide industry expertise to the Bank.

RPAC members meet as required to discuss issues related to retail payments. Agendas and any discussion material are published before each meeting.

Not a member of RPAC? Read discussion materials prepared for RPAC meetings and send us your feedback by .

Retail payments supervision and access to Real-Time Rail

Consumers and businesses benefit from innovation in the payment system when the right precautions are in place. The Bank’s retail payments supervisory framework will complement work led by Payments Canada to modernize Canada’s core payment systems. A new payment system, Real-Time Rail (RTR), is an important part of this modernization.

When launched, the RTR will allow Canadian consumers and businesses to exchange funds in real time. Payment service providers may have access to the RTR system if they:

  • are eligible for membership with Payments Canada
  • meet specific requirements

Under the Canadian Payments Act, entities eligible for Payments Canada membership include:

  • domestic and authorized foreign banks
  • other deposit-taking institutions such as trust and loan companies

The Department of Finance Canada is working to expand the eligibility criteria to include payment service providers supervised under the Retail Payment Activities Act. When Finance Canada expands the eligibility requirements, payment service providers who wish to connect to the RTR must register with the Bank before they can apply to become a member of Payments Canada.

Within the RTR system, entities will be able to:

  • exchange payments in real time
  • settle and clear their own transactions
  • rely on other participants to provide settlement service

Once registered, payment services providers that wish to settle transactions will be required to apply to open a settlement account with the Bank.

Keep in touch

For project updates, subscribe to the Retail Payments Supervision newsletter.

If you have questions about retail payments supervision or have any comments on this topic, contact us.