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

According to the Act, payment service providers may 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
  • holding funds until the end user withdraws or transfers them
  • 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 will continue to regulate money service businesses in relation to:

  • anti-money laundering
  • anti-terrorist financing

However, to manage operational risk and safeguard end-user funds, the Bank could also supervise a money service business as a payment service provider.

About the supervisory framework

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

  • registration
  • mitigation of operational risk
  • safeguarding end-user funds
  • reporting
  • fee payment


A payment service provider will need to register with the Bank before performing any retail payment activities. The Act includes a transition period which will allow existing payment service providers to continue carrying on retail payments services until they are registered with the Bank. 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 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 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

Fee payment

A payment service provider will need to pay a registration application 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 as regulations are developed on the amount of these fees and how they will be calculated.

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 Act 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 Act. 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 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 Act to further clarify its supervisory expectations. These documents will:

  • explain how the Bank interprets the Act
  • 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 Act will come into force.

How to get involved

Here is how we are 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

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 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 of Canada.

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.