Retail Payments Supervision

Learn about the Bank’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 with the aim of building confidence in the safety and reliability of their services while protecting users from specific risks.

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

About payment service providers

Once the Act comes into force, the Bank will supervise payment service providers. These include a variety of entities that perform electronic payment functions, such as payment processors, digital wallets, currency transfer services and other payment technology companies that offer any of the following services:

  • providing and maintaining a payment account for transferring funds electronically
  • holding funds until the end user withdraws or transfers them through an electronic funds transfer
  • initiating an electronic funds transfer as requested by an end user
  • authorizing or transmitting instructions about an electronic funds transfer
  • clearing or settling electronic funds transfers

These entities may have a place of business in Canada or perform retail payment activities for an end user in Canada.

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) will continue to regulate money service businesses in relation to anti-money laundering and counter terrorism financing. However, a money service business could also be supervised by the Bank as a payment service provider to manage operational risk and safeguard end-user funds.

About the supervisory program

The Bank will hold consultations on various aspects of its supervisory role as regulations are developed. In carrying out its responsibilities under the Act, the Bank will also consider the efficiency of payment services and the interests of end users.


A payment service provider will need to register with the Bank before performing any retail payment activities. The Bank will maintain a public registry of all regulated payment service providers as well as a list of those whose registration has been refused or revoked.

Mitigating operational risk

A payment service provider will need to show that it has a risk management and incident response framework in place. It will also need to 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 Act, 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


A payment service provider will need to pay a fee when it applies for registration. Once registered, it will be required to pay an annual fee to recover expenses related to the Bank’s supervisory role. Consultations on the amount of these fees and how they will be calculated will be led by the Department of Finance Canada as regulations are developed.

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 program 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 program is developed.


1. Legislation

The Act establishes the legal framework for the new supervisory program, including its scope and powers. It was approved by Parliament on June 29, 2021, and is expected to come into force as described below.

In progress

2. Regulations

The Act will be supported by regulations to help clarify the details of the legislation. Regulations, like legislation, have the force of law.

  • Drafting regulations: While the Department of Finance Canada drafts regulations, the Bank will engage with stakeholders and provide technical expertise and advice as required.
  • Approving regulations: 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 in the Canada Gazette, Part 1: Regulations will be published for public comment in Part 1 of the Canada Gazette.
  • Publishing in the Canada Gazette, Part 2: 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.

3. Guidance

Once regulations are published in the Canada Gazette, Part 2, the Bank will publish guidance on specific topics related to the Act to provide further clarity on its supervisory expectations. These documents will explain how the Bank interprets the Act and provide transparency around the Bank’s supervisory role.

4. Coming into force

The Act is expected to come into force in stages. For example, payment service providers will likely 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 Act will come into force.


The Bank continues to gather information from industry and stakeholders to better understand the retail payment services landscape and advance its work on building the supervisory framework. The Bank plans to conduct extensive outreach with stakeholders before the Act comes into force.

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

Retail payments supervision and access to Real-Time Rail

The retail payment supervisory framework complements work led by Payments Canada to modernize Canada’s core payment systems. Consumers and businesses benefit from innovation in the payments’ ecosystem when the right safeguards against risks are in place. An important part of the payments modernization initiative is a new real-time payment system called the Real-Time Rail (RTR).

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

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

Currently, 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 RPAA.

Before they can apply to become a member of Payments Canada, payment service providers wishing to connect to the RTR need to register with the Bank of Canada.

Within the RTR system, entities will be able to exchange payments in real time. They may also choose to settle and clear their own transactions, or they can rely on other participants to provide settlement service. Those wishing to settle transactions will be required to apply to open a settlement account with the Bank of Canada.

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