Find out which individuals and entities are subject to the Retail Payment Activities Act and must register with us.
According to the Retail Payment Activities Act (RPAA), payment service providers (PSPs) 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 retail payment services.
Payment functions
We are interpreting the payment functions outlined in the RPAA to determine which entities or individuals will be considered a PSP.
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
- do not provide or maintain a payment account if they store personal or financial information:
- 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
Information about how we interpret this function 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 when the payer sends an instruction 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 when the payee sends an instruction sent 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 PSP authorizes an EFT if it:
- requests that the end user confirm whether 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 PSP 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. It includes:
- preparing and calculating final balances for settlement
- exchanging the necessary information
The settlement process releases the payment obligations between two or more PSPs according to the terms of the transaction. The transaction is considered complete once settlement takes place.
Money service businesses
Individuals or entities registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) as a money service business must register with us as a PSP if they perform retail payment activities covered by the RPAA.
Our role is to supervise registered PSPs in relation to operational and financial risks to ensure the safety and the reliability of PSPs.
FINTRAC will continue to regulate money service businesses in relation to:
- anti-money laundering
- anti-terrorist financing
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If you have questions about retail payments supervision or have any comments on this topic, contact us.