The regulatory landscape for cheque cashing has changed significantly after FINTRAC’s latest update. New regulatory changes were supposed to be implemented on 1st October 2025, but the timeline accelerated, with the rules taking effect on 1st April 2025.
Your cheque cashing business must now act quickly to meet with FINTRAC’s new compliance requirements. If you cannot adhere to the latest rules, you may face penalties or debanking.
We understand you may not know what to do to meet FINTRAC’s new requirements for cheque cashing service providers. Read through this article to get a better understanding of FINTRAC’s expectations of you as a cheque cashing business.
Cheque Cashing Business: FINTRAC Definition
Before understanding the new FINTRAC compliance requirements for cheque cashing services, you must know whether your business qualifies as one. The qualification criteria include:
- You offer to cash cheques for customers in exchange for a fee
- You have a business place in Canada, including physical locations, employees, or branches
Meeting these conditions means you qualify as a cheque cashing business and must fulfill new FINTRAC requirements.
New FINTRAC Compliance Requirements For Cheque Cashing Businesses
The new FINTRAC compliance requirements have been designed to prevent cheque cashing businesses from committing or being victims of financial fraud. Let’s look at the key changes implemented on 1st April 2025:
- Cheque Cashing Businesses Must Now Register As A MSB
Like payment service providers, remittance companies, and currency exchanges, cheque cashing businesses in Canada now fall within the scope of the legal definition of a money service business (MSB). Consequently, all cheque cashing entities have to complete an MSB registration. Unless you’re registered as an MSB with the regulatory authority, FINTRAC, your business cannot continue to operate legally.
- A Cheque Cashing MSB Must Implement A Compliance Program
As a registered cheque cashing FINTRAC MSB, you must develop a compliance program. The program will serve as the foundation for complying with FINTRAC’s new requirements.
The five key steps of implementing a robust FINTRAC compliance program include:
- Appointing a Canadian compliance officer to meet FINTRAC’s expectations for a compliance officer.
- Develop a AML policies that fulfills all the obligations under the Proceeds of Money Laundering and Terrorist Financing Act (PCMLTFA)
- Conduct a risk assessment that considers your clients, business locations, services, and deliverables to identify vulnerabilities in your MSB
- Develop an ongoing FINTRAC compliance training program for your employees so they can identify suspicious transactions and clients easily
- Ensure your compliance policies address client identity verification requirements
Having an effective compliance program in place will help your cheque cashing MSB avoid unnecessary audits by FINTRAC.
- All Cheque Cashing MSBs Must Fulfill “Know Your Client” Obligations
Know Your Customer (KYC) obligations must be fulfilled by all cheque cashing money service businesses in Canada. These regulations include verifying your client’s identity during onboarding and if they ask you to cash single or cumulative cheques valuing $3,000 or more.
The key methods you can use to verify your client’s identification include:
- A government-issued photo
- A credit file containing valid and current information about your client
- The dual process method for confirming your client’s name and address from one reliable source and verifying your customer’s name and date of birth from another reliable source
- Confirmation from a previous affiliate of yours about the client’s identity
- Reliance method involving identity verification by another reporting entity
Following the identity verification methods diligently will help you fulfill FINTRAC’s compliance requirements easily.
- Strict Record-Keeping Rules Must Be Followed
All cheque cashing MSBs have to submit transaction reports to FINTRAC for compliance. These include:
- Suspicious Transaction Reports
- Large Transaction ReportsÂ
- Listed Person or Entity Property Reports
The main purpose of these reports is to ensure your business is not engaging in any illegal behavior. They also help FINTRAC identify and flag suspicious clients.
Your business must also keep records of all transactions exceeding the value of $3,000. The records must include the name of your client, the date of the transaction, the total amount, the name of the cheque issuer, and the reference number.
- Ministerial Directives Must Be Applied By Cheque Cashing Money Service Businesses
Every business with a cheque cashing MSB license must apply ministerial directives. FINTRAC always informs reporting entities whenever a new directive has been issued. This makes it easier for businesses to apply the latest orders to their business.
What Will Happen If You Don’t Follow New FINTRAC Compliance Requirements For Cheque Cashing Businesses?
Non-compliance with FINTRAC MSB license and KYC requirements can lead to administrative monetary penalties. These may range from $1 for minor violations to $500,000 for a very serious violation by an entity.
You may also face criminal charges for operating an illegal business or aiding suspicious transactions. Implementing a robust compliance program can help you avoid these risks after cheque cashing MSB registration.Â
FAQs
Is There A Deadline For Cheque Cashing MSB Registration?
The guidance released by FINTRAC states that cheque cashing businesses should be registered by April 1, 2025.Â
Is FINTRAC Cheque Cashing MSB Registration Mandatory If You Already Have A Provincial License?
Yes, you will still have to register as a MSB with FINTRAC at the federal level to operate legally.
Why Did FINTRAC Accelerate The Timeline Of Its New Compliance Requirements?
FINTRAC accelerated its timeline for new compliance requirements because of an urgency to tackle financial crimes in Canada.
What Are FINTRAC Reporting Requirements For Cheque Cashing Businesses?
FINTRAC’s reporting requirements state that cheque cashing MSBs must submit suspicious transaction reports when they have reasonable grounds to suspect a client, such as verified information that supports a client’s engagement in money laundering.
Sign Up For Renno & Co. Fintech MSB Registration Services For Your Cheque Cashing Business
Renno & Co. Fintech is a trusted legal and compliance service provider for Fintech companies in Canada. We help MSBs, payment service providers (PSPs), cryptocurrency service providers, and cheque cashing companies navigate legal and regulatory requirements.
Our team understands the consequences you may face if you don’t register your cheque cashing business with FINTRAC. That’s why we’re here to help. We can register your company, develop compliance policies, appoint officers, train employees, and get your cheque cashing business banked.
Contact Renno & Co. Fintech today if you want comprehensive Fintech legal services or a consultation.
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