Top Guidelines Of Retail Payment Activities Act - Laws.justice.gc.ca

On April 30, 2021, the federal government introduced An Act Respecting Retail Payment Activities (short title, Retail Payment Activities Act) (the "RPAA"). The much-anticipated RPAA can be found in response to a consultation paper released by the Department of Finance in 2017, for a "New Retail Payments Oversight Framework" (the "2017 Consultation Paper").

The RPAA signifies the government's ongoing determination to regulate brand-new and increasingly complicated "retail payment activities" driven by innovative payment methods and innovations. The RPAA will work as the first regulatory routine for retail payment suppliers in Canada. Not remarkably, it comes in the middle of a more comprehensive regulatory reaction by a government concentrated on safeguarding customers, cultivating competition and promoting development in the digital age.

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Who will be controlled? As a starting point, the RPAA will regulate "retail payment activities" that are either: Performed by a "payment provider" ("PSP") that belongs of business in Canada, or Performed for an "end user" in Canada by a PSP that does not have a place of company in Canada, however directs retail payment activities at people or entities that remain in Canada.

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A PSP is an entity that performs a "payment function" as a service or company activity that is not incidental to another service or business activity. The concept of what constitutes "incidental" to another service will likely be the topic of argument at the margins of this legislation. Given regulatory analyses in other areas like the registration of funds transmitters as moneys services companies, the determination will likely concentrate on excluding business where the payment function they help with is a small element of their service model, instead of a central part of it.

The funds payment function is simply a corollary to their real service financing to customers. What activities will be managed? Full Article of regulation under the RPAA is "retail payment activity" performed by a PSP or for an end user and defined as a "payment function that is carried out in relation to an electronic funds transfer that is made in Canadian currency or another country currency or utilizing a system that satisfies recommended requirements".