The Retail Payment Activities Act (RPAA) in Canada includes regulations that monitor the operations of Payment Service Providers (PSPs) and hold them accountable for activities that violate the RPAA.
Every PSP must also register under the RPAA to perform its payment activities seamlessly. If you want to learn more about challenges in RPAA registration, dive below.
RPAA Final Regulations For RPAA Registration
The RPAA and its final regulations create a framework that oversees how PSPs and retailers handle end-user transactions. Any entity that performs payment activities as a core service or business must complete the RPAA registration form.
A PSP must also complete their RPAA registration if they are offering the following services under RPAA final regulations:
â—ŹÂ Managing an end-user account or their funds
â—ŹÂ Holding funds for an end-user
â—ŹÂ Performing electronic funds transfer (EFT) for end-users
â—ŹÂ Offering services to clear EFTs
If your business performs any of these activities, you must complete the RPAA registration process. Non-compliance may result in monetary penalties.
The Main Challenges in RPAA Registration
To complete your business's RPAA registration process, you must visit the PSP Connect portal. Filling out the relevant form will help you perform your payment activities while following federal registration.
However, you may face some challenges in RPAA registration. Let’s look at their details and solutions to help you navigate the process of RPAA registration:
1. RPAA Registration Has a Specific Timeline
RPAA registration has a transition period during which PSPs must register. If a service provider misses the RPAA registration deadline, they must suffer consequences such as a long waiting period before beginning their operations.
This is why you must familiarise yourself with the RPAA registration deadline:
â—ŹÂ 1st November 2024 to 15th November 2024 - Any PSP that has registered under the RPAA can continue their operations without any interruptions
â—ŹÂ 16th November 2024 to 7th September 2025 - PSPs who register during this time window will have to wait for 2 months after submitting the RPAA registration application before continuing their operations.
â—ŹÂ 8th September 2025 - The complete RPAA compliance period will begin on this date, so every PSP after 8th September must wait for approval from the Bank of Canada before they can operate
If you miss the window before 8th September 2025, you will have to wait a long period because getting approval from the Bank of Canada is a lengthy process. So avoid this challenge by registering your Canadian business promptly under the RPAA.
2. RPAA Final Regulations For Cryptocurrency Activities Are Complex
Understanding RPAA registration regulations is a challenge for a lot of people. The RPAA final regulations for cryptocurrency trading are different from the rules for transactions involving regular currency.
For example, if you’re a service provider dealing solely with crypto transactions, you don’t have to complete the RPAA registration process. Another RPAA exemption applies to the buying and selling of cryptocurrency.
Such payment functions don’t come under retail activities. This is why you will not have to register under the RPAA if you’re performing such functions.
However, you will have to register under the RPAA if you offer other payment services along with cryptocurrency transfers. The good news is you can overcome the challenge by keeping some things in mind.
A service provider engaging in cryptocurrency transactions will have to complete RPAA registration if they are also offering:
â—ŹÂ Prepaid Cards
â—ŹÂ Fiat Money Transfers
Keeping this rule in mind will help you decide whether your business is applicable for RPAA registration.
3. Navigating RPAA Registration Is Difficult
One of the challenges in RPAA registration is navigating its process. The online portal by the Bank of Canada requires you to offer specific information about your business.
You must also ensure the data you’re providing them is compliant with the RPAA final regulations. Any discrepancy may result in penalties or revocation of your RPAA registration.
The best way to overcome this challenge in RPAA registration is to hire a lawyer to help you navigate this federal act. Attorneys with expertise in RPAA policies can help you develop a registration strategy.
They can also serve as the main point of contact between the Bank of Canada and your company. The great thing is that you will not have to worry about non-compliance when using a lawyer to navigate RPAA registration.
4. RPAA Registration May Require You To Adjust Operations
PSPs that register under the RPAA and don’t comply with regulations are subject to scrutiny by the Bank of Canada. You may have to face penalties in the form of fines. The Bank of Canada may also require you to alter your operations.
If you don’t adjust your operations, the Bank of Canada may restrict your volume of transactions. The Bank of Canada may also revoke your RPAA registration approval.
The main solution to this problem is ensuring your business policies adhere to RPAA compliance. You can check the Bank of Canada website to understand the RPAA framework and regulations that every PSP must follow.
How to Successfully Complete The RPAA Registration Process
Overcoming challenges in RPAA registration and completing the process will be a breeze if you keep these tips in mind:
1. Perform a Pre-Registration Audit
A pre-registration audit is necessary to understand whether your response framework, payment activities, and internal company policies are following RPAA final regulations. This will help you address problems that you may face during registration due to non-compliance.
2. Form an RPAA Compliance Team
Once you know the gaps your company has to fill before RPAA registration, forming a compliance team will be necessary. Professionals well-versed in RPAA final regulations can help you take steps that will enhance your company policies while ensuring compliance.
3. Prepare Yourself For Delays And The Waiting Period
The first deadline for RPAA registration has already passed. This means any company applying under this act will now have to wait for 60 days before it can start operations.
So you must prepare yourself for this gap in your payment activities. You may also face delays if your RPAA registration application is incomplete or has discrepancies.
4. Seek Help From Legal Counsel
Navigating RPAA regulations and application forms can be difficult, especially if you don’t have proper knowledge about this federal legislation. Seeking guidance from an attorney in such cases is helpful because they can serve as a bridge for communications between you and the Bank of Canada.
Get in Touch With Renno & Co. Fintech For Overcoming Challenges In RPAA Registration
Every business managing retail payment functions for fiat money must submit its RPAA registration form in Canada. Otherwise, they may not be allowed to perform their activities fully or may face partial restrictions.
To understand and overcome challenges in RPAA registration, get in touch with us now to benefit from the legal expertise of our RPAA counsellors.
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