Canada Retail Payment Activities Act

The RPAA applies when an individual or entity performs one or more prescribed payment functions as a service or business activity that is not incidental to another activity. The five current functions cover providing or maintaining payment accounts, holding end-user funds, initiating electronic funds transfers, authorizing or transmitting payment instructions, and providing clearing or settlement services. The activity must relate to an electronic funds transfer made in Canadian currency, a foreign currency or a unit meeting prescribed criteria.

The Act reaches PSPs with a place of business in Canada and foreign PSPs that direct covered activities at individuals or entities in Canada for Canadian end users. Statutory and regulatory exclusions include certain merchant-limited instruments, securities-related transactions, cash withdrawals at automated teller machines, designated payment systems, qualifying intra-group transfers, incidental payment activities, and specified regulated financial institutions. Banks and authorized foreign banks are among the entity-based exclusions.

Covered PSPs must register with the Bank of Canada. The transition period ended on September 7, 2025; applicants entering the market after that date generally must receive a registration decision before performing retail payment activities.

The Bank of Canada supervises registered PSPs for compliance, while the Minister of Finance exercises national-security powers connected to registration and ongoing activity. Principal obligations include:

• Operational resilience: PSPs must maintain a written risk-management and incident-response framework addressing availability, integrity and confidentiality, with controls for cybersecurity, fraud, business continuity, data, technology, personnel and third parties.
• Incident reporting: Material incidents must be reported to the Bank and, where applicable, to materially affected end users, other PSPs and designated clearing houses.
• Safeguarding funds: PSPs that hold end-user funds must use a permitted safeguarding method, maintain a written safeguarding framework and arrange required independent reviews.
• Reporting and records: PSPs must report significant changes and new activities, retain compliance records, and submit an annual report by March 31 for the preceding calendar year.

The Act authorizes supervisory information requests, compliance orders, court enforcement and administrative monetary penalties. Under the Regulations, serious violations can attract penalties of up to C$1 million and very serious violations up to C$10 million. Registration applications may also be reviewed for national-security concerns, with powers to require undertakings or conditions or direct refusal.

The RPAA is technology-neutral and is not a general licensing statute for crypto trading or custody. Its application to a crypto business depends on the payment functions performed, the type of electronic funds transfer involved, whether payment activity is incidental, and whether an exclusion applies. Bank of Canada scenarios state that a crypto-only exchange handling no Canadian or foreign currency does not perform a retail payment activity under the current definition. A crypto-backed open-loop prepaid-card service, by contrast, can perform in-scope payment functions and require registration.

Amendments enacted in March 2026 would add the transmission or maintenance of an end user’s encrypted or tokenized payment instrument or private key to the statutory definition of a payment function. Those amendments are listed by Justice Laws as not in force and require an order in council to commence.

The Act received royal assent in 2021, its Regulations were registered in 2023, registration opened in 2024, and the main supervisory obligations commenced in 2025. The consolidated Act was last amended on March 26, 2026. Because annual assessment-fee provisions remain uncommenced and crypto-related scope amendments await commencement, this profile uses the status Partially effective while noting that the core supervisory regime is already in force. This profile is an editorial overview, not legal advice.