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The Retail Payment Activities Act (RPAA) becomes
effective on Nov. 1, 2024. This new legislation mandates that
payment service providers (PSPs) register with the Bank of Canada
by Nov. 15, 2024, a process that entails submitting detailed
information about business operations, risk management practices
and safeguarding measures for end-user funds.
In the overview below, we outline the steps involved in
registration, as well as what PSPs can expect during the
post-registration “transition” period.
Registration step-by-step
Prospective applicants should begin by consulting the Bank of
Canada’s How to complete a registration application: A
step-by-step guide. The application process can be summarized
as follows:
- Create an account in PSP Connect
Begin by creating an account in the PSP Connect web application.
This platform will be your primary tool for submitting registration
information, updating details, and paying fees to the Bank of
Canada. At the time of writing, PSP Connect is not yet live. It is
expected to become available when the registration period begins on
Nov. 1, 2024.
- Complete the application form
The application form requires detailed information about the
PSP’s business structure, payment functions, geographic scope,
risk management practices and relationships:
To complete the application, applicants will also need to submit
required documents and pay the registration fee. Gather and upload
all necessary documents as specified in the application form. This
includes financial information, details about third-party service
providers, and any relevant provincial or territorial
registrations. In order to submit the application for processing,
applicants must pay the one-time, non-refundable registration fee
through PSP Connect.
- Application review and transition period
Between Nov. 1, 2024 and Sept. 7, 2025, the Bank of Canada will
review and assess all of the applications it receives. Note that
once the application is marked as completed and received, the
applicant cannot cancel the application.
During this 10-month “transition period,” the
Bank:
- May issue requests for additional information to the
applicant - Will share applications with the Department of Finance
for the purposes of conducting a national security review. - Will share applications with the Financial
Transactions and Reports Analysis Centre of Canada for the purposes
of coordinating between the two regulators. - Is prohibited from informing applicants about the
outcome of their application. The only exception is where the
Minister of Finance issues a directive to the Bank to refuse to
register an applicant. - Will publish a list of all applicants on its website
(exact timing to be determined).
Individuals or entities that currently provide retail payment
services in Canada can continue to provide these services during
the transition period, but only if they have submitted an
application by Nov. 15, 2024. PSPs that operate during the
transition period without submitting an application may be subject
to enforcement measures under the RPAA.
- Receive confirmation
After the transition period ends on Sept. 7, 2025, the Bank of
Canada will publish a list of registration decisions on its
website, including lists of:
- Registered PSPs; and
- Individuals or entities that had their registration refused or
PSPs that had their registration revoked and the reasons why,
including if a PSP has stopped operating.
The RPAA and related regulatory guidance provides opportunities
to review or appeal decisions to refuse or revoke a PSP’s
registration application.
- Ongoing compliance
Once registered, PSPs are advised to maintain compliance by
implementing and maintaining a compliance program, regularly
updating the information on file in PSP Connect and adhering to
reporting requirements. Registered PSPs may also be required to
submit new registration applications in certain circumstances, such
as where a PSP is the subject of an acquisition of control. In
addition, registered PSPs are required to pay an annual assessment
fee to the Bank of Canada.
Taking the necessary steps to comply with the RPAA will not only
help avoid potential penalties but also enhance the trust in and
security of Canada’s retail payment systems.
Read the original article on GowlingWLG.com
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.