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
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