Payment service providers (PSPs) must begin preparing to implement the Retail Payment Activities Act (RPAA). As a PSP, you must register with the Bank of Canada, as they will maintain a public registry of the registered PSPs.
If you fall within the category of PSPs (most MSBs do!) and want to register with the Bank of Canada starting 1 November 2024, here is everything you need to know about PSP registration, RPAA compliance, and key milestones and dates.
Overview of the Retail Payment Activities Act (RPAA) Legislation
The RPAA is a legal framework that ensures the supervision of PSPs by the Bank of Canada. This means the framework is meant to supervise the powers and scope of PSPs operating in Canada.
Canadian Parliament approved the RPAA on June 29, 2021. The Bank of Canada has provided recent RPAA key milestones and timelines to ensure PSPs can follow this registration process as smoothly as possible.
PSP vs. MSB Registration in Canada: The Difference Explained
PSP registration does not replace MSB registration in Canada. Any MSB that wants to register will also have to follow this registration process to ensure they are in compliance with all relevant laws.
As a money service business, you must obtain an MSB licence from FINTRAC, a regulatory body which oversees AML (anti-money laundering) and counter-terrorist financing. Under the RPAA, most MSBs are considered PSPs and must register with the Bank of Canada to ensure their businesses have adequate systems in place to manage incident response and other operational risks.
PSP Registration in Canada before November 2024: All You Need to Know
The Bank of Canada has released the key milestones and timelines for PSP registration based on the RPAA.
Our fintech lawyers and compliance officers have created a comprehensive guide to help you understand how to begin the registration process before November 2024.
1. Meet the Criteria for PSP Registration
You have to meet the following criteria to ensure PSP registration within the RPAA framework:
- Be a PSP
To fulfil this criteria, you must perform one or more payment functions that are not incidental to another business activity or service.
- Meet Geographic Criteria
1. Your place of business must be in Canada, regardless of where your services are directed or end users are.
2. If you have a place of business outside Canada, then you must perform retail payment activities for end users in Canada or direct retail payments at entities or individuals in Canada.
- Perform Retail Payment Activities
You must perform payment functions related to an Electronic Funds Transfer (EFTs) made in Canadian or foreign currencies (this doesn’t include digital currencies).
- Perform Payment Functions Not Excluded from RPAA Regulations & Associated Regulations
1. Entity-based exclusions from the RPAA:
Credit unions, Payments Canada, SWIFT, authorized foreign banks, insurance companies, banks, trust and loan companies, and mandataries and agents of PSPs.
2. Activity-based exclusions from the RPAA:
Automatic banking machine transactions, securities transactions by an individual or entity, and internal transactions of affiliated entities.
2. Report Your Retail Payment Activity Metrics
All applicants registering under the RPAA must take reasonable steps to report their retail payment activity metrics. Reporting such metrics ensures that information is captured about the PSP's interconnectedness and ubiquity.
It also helps to monitor issues and trends, supervise PSPs, and take enforcement actions when necessary.
Here are some required metrics you must report as a PSP:
- Average value of end-user funds held
- Number and value of EFTs
- Currency composition of end-user funds held
- Number of end users
- Names of other PSPs that services are provided to
As an applicant, you must report all payment activities within the scope of the RPAA. However, you must not include retail payment activities excluded from the RPAA.
3. Pay the One-Time PSP Registration Canada Fee
Under the RPAA, subsection 29 (2), PSP registration applications require a one-time non-refundable fee.
From November 1, 2024, the PSP registration application fee will be $2,500. No Canadian sales tax will apply to this fee.
You must pay this fee in full once using your credit card on PSP Connect. There is no option to pay it in instalments.
If you have made multiple unsuccessful credit card attempts, you can use wire or direct deposit transfers for this purpose. Once the Bank of Canada receives your application fee in full, they will begin evaluating your application.
4. Complete the Canadian PSP Registration Form
Filling out the Canadian PSP Registration form is an extensive process. You will have to gather the documents to complete it during the fifteen-day registration phase.
To begin this process, you must first create a PSP Connect account and fill out the application form within the account.
The Bank of Canada considers the account holder to be the organization's administrator. If you want to add more representatives, you can do so under User Profile through My Account.
If you want to learn more about the PSP registration Canada form, you can use this Bank of Canada guide to ensure complete RPAA compliance.
5. Make Sure to Register Before November 15, 2024
The RPAA registration provisions will begin taking effect on November 1, 2024. Entities and individuals are required to submit their applications by November 15, 2024.
Please note that funds safeguarding frameworks and requirements for risk management will come into force in September 2025.
RPAA Key Milestones & Timelines
It is crucial to remain informed about the key milestones of RPAA regulations to ensure RPAA compliance. Here are the most important dates for you to keep in mind:
- 1 November 2024: Registration begins for existing PSPs
- 15 November 2024: Registrations for existing PSPs closes
- 16 November 2024 to 7 September 2025: This will be a transition period for RPAA compliance according to the new regulations
For more information, contact our RPAA consultants to help guide you through the PSP registration process with the Bank of Canada.
How Renno & Co Compliance Officers Can Help You with PSP Registration
Our legal experts and compliance officers can offer you the support and guidance you need as you begin the PSP registration process.
Here is how the Renno & Co. Fintech Team can help you:
1. Providing Representation & Guidance
We represent clients with the Bank of Canada throughout the process and ensure you move through it easily.
From helping you collect documentation to assistance with filling out the registration, we can ensure your registration is handled from A-Z.
2. Submission of Application to the Bank of Canada
Our experts can help you submit your PSP application to the Bank of Canada. We develop documents that are mandatory for the submission of applications.
Then, we prepare and submit the application while answering any clarification requests presented by the Bank of Canada. Communication is important to us during this time, so we make sure you are in the loop about how we are helping you comply with the RPAA and register your PSP with the Bank of Canada.
3. Creation of a Risk Management Framework
Our aim is to ensure that you can meet the Bank of Canada's requirements under the RPAA regulations.
Because of this, our experts create an incident response and risk management framework that meets all requirements and complies with the RPAA.
FAQs
How long will it take to fill out my PSP registration form?
The length of time it will take you to complete the PSP registration form will depend on your PSP's business activities and corporate structure. You can contact the Renno & Co. Fintech Team to expedite this process and ensure professional guidance for error-free registration and compliance.
What part of my business will be covered under the RPAA after registration?
Under the RPAA, all retail payment activities related to EFTs will be covered. The exception to this rule is if the transaction is performed incidentally to another business activity or service by the PSP or subject to other exclusions.
What is the transition period for PSPs?
The transition period is between November 1, 2024, and September 7, 2025. If you have submitted your application to the Bank of Canada, you can continue to perform retail activities during this period.
How long will it take for the Bank of Canada to respond to my registration application?
If you submitted your application during the transition period, you can expect to receive a response from the Bank of Canada starting September 8, 2025. According to the RPAA, the Bank has been prohibited from informing applicants about the application outcome during the transition.
What happens if I delay registration?
Failure to register by Nov 1 - Nov 15 can mean:
- Potential de-banking
- 60-day operational freeze
- Heavy fines
Contact Renno & Co. Fintech for Bank of Canada RPAA Registration Today
To begin the Bank of Canada registration process, contact our team of legal and compliance experts today!
