Retail payments supervision
After the Retail Payment Activities Act (RPAA) received Royal Assent in 2021, retail payments supervision became the Bank of Canada’s fifth core function. In 2022, the Bank focused on building the supervisory program to support its new mandate.
Preparing for the new mandate
The Bank supported the Department of Finance Canada on various initiatives, including the development of regulatory requirements to prepare for when the RPAA comes into force.
The Bank shared industry feedback collected through the Retail Payments Advisory Committee (RPAC). This advice and feedback contributed to Finance Canada’s development of regulations that support the RPAA.
Setting out the Bank’s supervisory role
Also in 2022, the Bank published its supervisory framework, which sets out how the Bank will:
- supervise payment service providers
- promote compliance with the RPAA
- monitor and evaluate retail payment trends and issues
The framework includes details on how the Bank will:
- register payment service providers
- assess compliance with the RPAA
- take enforcement actions when required
Ensuring operational readiness
The Bank continued to prepare for when the RPAA and its regulations come into force. This included developing:
- policies and practices for registering payment service providers and for assessing their compliance with requirements to manage operational risk and safeguard funds
- enforcement tools and actions to address violations
- the information technology system that will support the Bank in its new mandate
The Bank expanded its outreach activities to raise awareness of the RPAA and the Bank’s supervisory role. These activities included giving presentations about the new mandate and participating in panel discussions at industry conferences. As well, senior leadership gave several media interviews.
Outreach continues through:
- direct engagement with payment service providers
- participation in industry events
- distribution of the retail payments supervision newsletter
- sharing news and events on social media
Consumers and the payment ecosystem need to be protected. Executive Director, Ron Morrow, unpacks how payment service providers can prepare for #RetailPayments supervision. http://ow.ly/u6UC50Ls8wE #CIX2022@CIXCommunityNov 2, 2022
https://twitter.com/bankofcanada/status/1587831371946500097?s=20&t=UxpwwiudITHb423v9PFdrw
Looking forward
In 2023, the Bank will:
- update the supervisory framework for retail payments, including publishing additional guidance on key components of the framework
- prepare for when the RPAA and its regulations come into force
- continue to raise awareness of the RPAA and the Bank’s supervisory role