July 25, 2017
Canada has introduced a regulatory framework providing oversight for PSPs that want to operate in the country, including those that want to provide online payments. The Canadian Department of Finance has posted the proposed regime that would regulate retail payments in the country for the first time, with an invitation for stakeholders to submit comments before Oct. 6 of this year.
According to payments attorneys who have commented on the consultation paper—A New Retail Payments Oversight Framework—a PSP is broadly defined in the document, so any payment providers operating in Canada (including mobile wallet providers and money services businesses) should review the proposals carefully and consider submitting comments.
The proposal has a number of new requirements for PSPs in Canada including new registration, capital and operating requirements.
“The Department has acknowledged that its traditional practice of regulating the players as opposed to the playing field is no longer appropriate in a rapidly changing retail payments space with evolving business models, activities and products,” said Stephen Redican, attorney with Toronto-based Borden, Ladner, Gervais. “Accordingly, consistent with recent international trends in payments oversight, notably in the European Union and Australia, and in line with the earlier recommendations of the Task Force for the Payments System Review, the Department has proposed the adoption of a functional approach to regulation. In this way, risks associated with a particular payment function will be treated similarly regardless of the type of organization providing the service.”