🇨🇦 Draft Retail Payment Regulation Out
Earlier this month, the Department of Finance Canada released the proposed Retail Payments Activities Regulations for comments.
The regulation is in response to the growing digital payments. ~85% of merchants now accept electronic payments vs. 60% in 2018.
It is estimated that ~2,500 payment service providers will be covered by the new regulation. They range from large corporations to small businesses, that provide services such as electronic payment systems and digital wallets.
🟦 Under the draft regulation, each payment service provider needs to:
📌 Register with Bank of Canada.
📌 Satisfy the reporting requirements.
📌 Have an adequate operational risk management framework.
📌 Hold end-user fund in regulated FIs, with insurance or guarantees.
A clear regulation will better protect consumers and small businesses. It will reduce the risk of the payment ecosystem and benefit the industry in the long run.
🟦 What is next:
Now - 3/28: draft regulation open for comments.
2024: service providers begin to register.
2025: supervision starts.
Sources: The Globe and Mail, Government Canada