How the RPAA will support payment innovation for the benefit of Canadians

In February 2023, the Department of Finance released the highly anticipated Retail Payments Activities Act (RPAA) regulations. Ron Morrow, Executive Director – Supervision at the Bank of Canada shares how the RPAA will support payment innovation for the benefit of Canadians and the importance of industry input on the draft regulations, which can be provided before March 28, 2023.

Headshot Ron Morrow

Why is the Bank of Canada introducing the Retail Payments Activities Act (RPAA) Framework, and how will the Department of Finance’s RPAA regulations support it?
The Retail Payment Activities Act was approved by Parliament in June 2021. Under the Act, the Bank will be responsible for supervising payment service providers (PSPs) with the aim of building confidence in the safety and reliability of their services while protecting end users from specific risks.

Every day, millions of Canadians place their trust in PSPs when they make a payment or transfer funds. We’ve been given the mandate to make sure that the trust Canadians place in PSPs is warranted – that they know which PSPs are registered, that their funds will be protected, and that operational risk will be well managed.

We’re in the process of setting up our program to deliver on our new mandate. Under our framework, we will supervise PSPs, promote their compliance with the RPAA, and monitor and evaluate trends and issues in the payment ecosystem. A key part of this will mean clearly communicating our expectations to the industry to ensure they understand and meet their obligations.

As you point out, the Ministry of Finance is responsible for developing regulations that will help clarify the details of the RPAA. In February, the government published a draft of these regulations in Part 1 of the Canada Gazette. These regulations are important – they will carry the force of law.

What other organizations or groups fed into the development of the regulations, and how can the industry provide input on retail payment regulation in Canada going forward?
Feedback from the payments industry has been very important throughout the process and will continue to be going forward. Certainly, the feedback we received to date from RPAC – the Retail Payments Advisory Committee – was very important in shaping our advice to Finance on their proposed regulations. We established RPAC in 2020 to get industry expertise as we worked toward putting our new mandate into action.

Currently, the Ministry of Finance has made the draft regulations available for public comment until March 28. I’d encourage everyone to go look at the regulations and contribute to their development by visiting this website: Comment on proposed regulations – ( This is your opportunity to help shape what’s coming, so it’s important that you give your input.

I’d also note that beyond the regulation period, we will be looking for further industry input on some of the details regarding our supervisory expectations. Our focus will be on our overarching goal of ensuring payment service providers register and are that they are appropriately managing operational risks appropriately and safeguarding their end-users’ funds.

What are the required next steps toward the implementation of the RPAA?
This is a complex mandate, and it will become operational in stages. We will continue to seek feedback from the payments community to make sure we get it right.

While the government continues to develop regulations, the Bank is continuing to engage with the payments industry and lay the groundwork for when the RPAA comes into force. We’re engaging with industry groups, individual PSPs and associations that represent them, and raising awareness of the framework more broadly.

Our current planning assumes that the final regulations will be published late this year. After the regulations are finalized, we will start to publish guidance for the industry on how we will carry out the activities of registration, risk-monitoring, and enforcement. We also continue to prepare the infrastructure for this mandate, building the technological and human resources capacity to carry out the needed work.

What should PSPs do to prepare for implementation of the RPAA?
PSPs can look at the legislation and the draft regulations and start to think about what they will need to do to comply with the Act. They can also look forward to reviewing our guidance materials as we roll them out, starting later this year. If, as we assume, regulations are finalized late this year, we expect to require PSPs to register with the Bank starting in 2024. The subsequent launch of our risk monitoring and compliance work is currently scheduled for 2025.

In the meanwhile, I hope that everyone in the payment community takes the time to become aware of the RPAA and the Bank’s supervisory mandate and begins to get educated about what’s to come. One way to help do that is to subscribe to our retail payments supervision newsletter, which will keep you up to date on the project and major milestones, like the release of our guidance.

You can also check out information on the Bank’s website, including reports of RPAC – our advisory committee.
PSPs can also spread the word about the Act among their partners, to make sure they are aware of the ACT.

What will the RPAA mean for people and businesses in Canada?
For Canadians, the RPAA will mean that they can continue to have confidence in the PSPs services that they use every day, whether or not they realize they’re using at least one, and often many PSPs, whenever they make payments. They can be sure that companies supervised by the Bank will safeguard their funds and manage their operational risk appropriately. That’s important.

For PSPs, regulation means they will need to register with the Bank of Canada, comply with expectations about managing their operational risk as well as safeguarding their end-users’ funds, make regular reports to the Bank, and pay an annual fee.

But I want to stress that we will take a risk-based approach that will focus on end-user impacts and the efficiency of payment services. We won’t take a “one size fits all” approach to this mandate. Essentially, this means that both the level of supervisory attention and the supervisory actions we take will be guided by the level of risk each PSP brings to consumers and the payments community.

Further, PSPs can meet our expectations about risk management and fund safeguarding using many approaches. Our job is to make the objective very clear. And then PSPs can focus on reaching the destination, not necessarily following a precise roadmap on how to get there.

We don’t want our supervision to stifle innovation. Quite the opposite. We want to carry out our supervision mandate in a way that builds confidence and fosters innovation. We want to help create incentives for competition. This regime opens up the possibility of access to other core payments systems, such as the real-time rail, which is under development.

Ultimately, we see the RPAA and our mandate as a clear win for Canadians and businesses – a way for companies to keep moving forward in a rapidly changing environment while keeping Canadians’ trust.

Hear more from Ron Morrow at The Payments Canada SUMMIT, happening May 3-5, 2023 at the Beanfield Centre in Toronto.

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