Explainer: Why is the financial industry calling for changes to the Canadian Payments Act?

What is the Canadian Payments Act?

The Canadian Payment Act (CP Act) is the legislation that sets out Payments Canada’s role and responsibilities. It also determines what types of organizations are eligible to be Payments Canada members. Currently, that includes banks, credit union centrals and very select other financial institution types, including securities dealers.

Payments Canada is a non-profit, public-purpose organization. We are responsible for Canada’s national systems for the clearing and settlement of payments. Simply put, our systems help get payments to where they need to be, whether a down payment on a home, money sent to a family member abroad or a bill payment. 

In order for financial institutions to use Payments Canada’s systems, membership is one of the necessary steps. With support from leaders across the financial industry, Payments Canada is asking the government to make changes to the Canadian Payments Act to expand the types of organizations that are eligible for Payments Canada membership.

Who do we want to include in our expanded membership eligibility?

Payments Canada wants more types of organizations to join our membership provided they can fulfill all membership requirements. They include:

Local credit unions

who are provincially regulated and a member of a central

Provide consumers, rural communities and small businesses access to financial services that may not otherwise be available.

Payment service providers

who will be registered with the Bank of Canada

They help businesses, people and the government with all types of retail payment activities.

Financial market infrastructures

designated by the Bank of Canada 

Provide behind-the-scene support for financial transactions, making sure they are processed, recorded and final.

Why do we want to change the CP Act?

Expanding membership provides a future with more industry collaboration and technological advancements. This could foster easier, safer and smarter payment options to meet the unique needs of people living in Canada, regardless of how much money they make, where they live or who they bank with. We’re just beginning to understand the potential innovation that modern payments will support.

By promoting more participation in Canada’s payment market, expanded membership eligibility could also spur investment in Canada, supporting our country’s economic stability.

How the proposed changes to the CP Act will provide the foundation to benefit:

A small business owner:

  • A reduction in the cost of doing business, by providing more cost-efficient payment options and lower fees related to paying or getting paid.
  • Better ways to manage cash flow, including more visibility into their financial position.
  • Improved security and payment fraud protection.

A new Canadian:

  • More accessible and inclusive payment options for those without a Canadian credit history.
  • Access to the payment platforms and services they are used to using at home.
  • More affordable and efficient solutions for sending money home to family.

A frequent traveler:

  • Access to consistent payment methods, no matter their location.
  • Safer means of payment that don’t require carrying cash or taking on fees for accessing foreign bank services.

Those experiencing an emergency situation or natural disaster:

  • Faster access to emergency or disaster assistance funds for consumers and businesses, as well as provincial or municipal governments.

Financially vulnerable Canadians:

  • Canadians in rural, remote or indigenous communities gain more financial services options that meet the unique needs of their communities.
  • More accessible payment options for people with disabilities.
  • Lower-cost payment options that support affordability for everyone, but particularly low-income Canadians.

An urban professional:

  • Easy, fast ways to pay and split bills in a group.
  • Improved commute through more ways to pay for transit.

Farmers in rural Canada:

  • Their local credit union could gain the ability to provide new, accessible, cost-effective financial services that meet the unique needs of their farming community.


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