What is the RPAA?
The RPAA is a Canadian federal legislation aimed at regulating and supervising PSPs to build confidence in the safety and reliability of their services while protecting end users from specific risks.
Who Needs to Register?
Under the RPAA, PSPs must register with the Bank of Canada before performing any retail payment activities.[1] A PSP, as defined by the RPAA, is an individual or entity that performs payment functions as a service or business activity, not incidental to another service or business activity. Specifically, registration is required if a PSP performs any of the following payment functions[2]:
- Providing or maintaining an account for an end user.
- Holding funds on behalf of an end user.
- Initiating an electronic funds transfer (EFT) at the request of an end user.
- Authorizing an EFT, transmitting, facilitating, or receiving EFT instructions.
- Providing clearing services for EFT transactions.
Registration Timeline
The RPAA includes a transition period, November 1, 2024, to September 7, 2025, to allow PSPs to apply for registration. PSPs should note the following important timelines:
- November 1, 2024 – November 15, 2024: Within the transition period is a prescribed 15-day period (November 1 – 15, 2024) where PSPs can begin registering. PSPs who register during this period may continue their operations without interruption or begin operations before the Bank of Canada issues its decisions on September 8, 2025.
- November 16, 2024 – September 7, 2025: PSPs registering after the prescribed 15-day period (November 1 – 15, 2024) and before the full compliance period (September 8, 2025) may operate after waiting 60 days after submitting their application.
- September 8, 2025, onwards: The full compliance period begins on September 8, 2025. From this date onwards, PSPs must receive registration approval from the Bank of Canada before operations.
RPAA Registration for Companies Dealing with Cryptocurrency
The Bank of Canada has published guidance on RPAA registration requirements for companies engaged in cryptocurrency activities. This guidance, presented through case scenarios, provides valuable insights into the registration obligations of different cryptocurrency business models:
- Individuals and entities are not required to register under the RPAA if they solely deal with cryptocurrency transactions.
- Individuals and entities may be performing payment functions incidental to non-payment activities and thus exempt from the RPAA. For example, performing payment functions exclusively to facilitate the purchase and sale of crypto and not as a distinct retail payment service.
- Individuals and entities that offer payment services in addition to cryptocurrencies transaction, like prepaid cards or fiat currency transfers, may be subject to registration requirements.
- A company that facilitates cryptocurrency trading without immediate delivery to clients’ external wallets is subject to provincial or territorial securities legislation.
Conclusion
This RPAA Registration Guide outlines significant regulatory changes for PSPs in Canada. With the registration period fast approaching, PSPs must prioritize timely registration to avoid enforcement action. By understanding RPAA requirements, timelines, and cryptocurrency-specific guidance, PSPs can ensure seamless compliance and maintain confidence in Canada’s retail payments ecosystem.
If you have questions about whether you need to register or would like assistance with the registration application process, our team would love to hear from you. Please do not hesitate to contact us at 1-800-604-1312 or via our contact page.
