Joint letter to the Minister of Finance on changes to Canadian Payments Act

Leading financial organizations have signed a joint letter calling for broader access to Canada’s payment systems.

Payments Canada has engaged a diverse coalition of organizations, including members and non-members, from across the payment industry to make a collective request of the federal government: to make amendments to the Canadian Payments Act part of Budget 2023 to expand Payments Canada’s membership eligibility.

Expanding Payments Canada membership to include local credit unions, RPAA-registered payment service providers and financial market infrastructure entities that meet the appropriate requirements will encourage greater competition and innovation, while maintaining the safety and soundness of Canadian payments. Broader access will support the introduction of new participants in Canada's payment system, and provide greater choice for Canadians and Canadian businesses in addressing their payment needs.

Read the joint letter below.

Dear Minister Freeland,

Re: Canadian Payments Act Amendments to Expand Payments Canada Membership

We are writing to request changes to the Canadian Payments Act (CP Act) to enable modernized, risk-based access to Payments Canada’s systems. Canada is at an inflection point in the evolution of the global payment ecosystem. The payment industry in Canada and abroad is in the midst of transformational change. Global payment system modernization initiatives, new market entrants, evolving regulation, and game changing technologies and services are transforming the payment landscape.

The Canadian regulatory framework has not kept pace with global and domestic payment developments. Payment service providers (PSPs) and credit union locals1 seek to access the payment system infrastructure to better serve their clients with enhanced electronic payments services. Unlike their international counterparts in other comparable jurisdictions, systemically important Canadian Financial Market Infrastructures (FMIs) are ineligible under the CP Act to be direct participants on Canada’s national payment systems.2

We commend you for taking an important first step toward enabling modern payments regulation through the Retail Payment Activities Act (RPAA) that received Royal Assent in 2021. The combination of RPAA and membership changes to the CP Act will enable broader access to Canada’s national payment system. Under the RPAA, PSPs will be required to register with the Bank of Canada and comply with operational risk management and end-user fund safe-guarding
requirements. We encourage the government to move forward and work with the ecosystem to define the important measures to manage risk, including market conduct, in retail payment activities. Payments Canada is similarly committed to working with members, stakeholders and regulators to ensure that any risks associated with market conduct and payment system participation are effectively managed within Payments Canada's rules.

At the same time, amendments to the CP Act are needed to broaden the membership of Payments Canada to allow safe, risk-based access to Payments Canada’s systems for qualifying entities. As the government implements changes to the CP Act, we encourage ongoing dialogue to ensure an appropriate and effective governance structure for Payments Canada. The government should also consider amendments to the CP Act to better manage the increasing risks associated with Payments Canada’s evolving role in the good faith pursuit of its public interest mandate.

As the Canadian payment ecosystem continues to evolve, non-financial institution entities are helping drive competition. National payment system enhancements are being made under Payments Canada’s Modernization program that are accelerating this evolution. Healthy competition in payments is the catalyst for innovation and will support Canada’s competitiveness globally, leading to improved payment products and services for Canadians and Canadian businesses.

CP Act amendments to expand Payments Canada’s membership eligibility have been under consideration for five years. In 2019, the Department of Finance issued its Report on the Review of the Canadian Payments Act that demonstrated broad-based stakeholder support for expanding membership. The Canadian payment ecosystem is aligned on the urgent need for CP Act amendments and the continued implementation of the RPAA.

We request the government amend the CP Act as part of Budget 2023 to allow RPAA-registered PSPs, credit union locals, and operators of financial market infrastructures that are designated by the Bank of Canada to be eligible for Payments Canada membership as outlined in this letter.


ATB Financial
Canadian Bankers Association
Canadian Credit Union Association
Canadian Federation of Independent Business
Central 1 Credit Union
CLS Bank International
Consumers Council of Canada
Electronic Transactions Association
Fintech Cadence
Fintechs Canada
KOHO Financial, Inc.
Payments Canada
Prosper Canada

1 Credit union locals are regulated in a similar manner as current Payments Canada members.
2 Under the Payment Clearing and Settlement Act , the Bank of Canada is responsible for the oversight of systemically important FMIs.

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