RPAA registration with Bank of Canada

• Starting November 1, 2024, PSPs must complete RPAA registration with the Bank of Canada to continue providing payment services. On November 22, 2023, the Department of Finance Canada issued relevant regulations in Part II of Canada Gazette concerning the registration requirements. The RPAA refers to Payment Service Provider any person or organization performing payment functions as core business rather than as a secondary activity. Retail payments include any electronic money transfer within Canada or any other included currency. Tetra Consultants will ensure you are fully guided through the entire process of RPAA registration and will also render any other services regarding company registration in Canada that may be needed. 

What is PSP in RPAA registration? 

• With regards to the Retail Payment Activities Act (RPAA) enacted in Canada, a Provider of Payment Solutions or PSP is any person or entity who provides one or more services coded as payment functions in the course of business when such activity is not an ancillary service to another business activity.  

• Payment Service Provider (PSP), refers to a person or a company who performs operations which result in the transfer of funds by electronic means. These may include the services of opening and maintaining payment accounts, collecting and holding users’ funds, initiating and/or executing wires, clearing and settling transactions, etc. 

Who must comply with RPAA registration requirements? 

• Within the context of Canadian law, the scope of the Retail Payment Activities Act (RPAA), can be regarded as more of a regulation focused on payment service providers (PSPs).  

Payment Service Providers (PSPs) with a presence in Canada 

• The RPAA will apply to any retail payment activities undertaken by PSPs that have a business location in Canada. 

Foreign-based payment service providers: 

• The provision also covers PSPs located outside the jurisdiction of Canada but conducting retail payment activities addressed to persons or entities within the territory of Canada. 

Criteria for PSP under RPAA registration 

To register as a Payment Service Provider (PSP) under the Retail Payment Activities Act (RPAA) in Canada, entities must meet specific criteria which are as follows: 

Payment functions 

For an entity to be classified as a PSP, it must render at least one of the following services: 

• Provision or maintenance of accounts: 

• • Carrying out the function of maintaining accounts for one or more end users. 

• Holding funds: 

• • The provision of services wherein funds are held on behalf of the end users within the organization. 

• Initiation of electronic funds transfers: 

• • This involves requests made by end users to have certain electronic funds transfers authorized and carried out. 

• Authorization of transfers: 

• • The act of permitting a transfer or payments per instruction. 

• Clearing services or settlement transactions: 

• • They include the services provided in clearing or settling the payment transactions within the organization. 

Geographic scope 

In order to achieve the status of a Payment Service Provider (PSP), such an entity can only satisfy one of the following: 

• Place of business in Canada: 

• • Regardless of the physical location of its end users, the PSP has to maintain an actual presence in Canada. 

• Directing activities to Canada: 

• • Where the PSP does not have a presence in Canada, it must still incorporate into its business model the solicitation of retail payment services to Canadians. 

Compliance with regulatory framework 

• It is mandatory for all PSPs to adhere to the regulatory guidelines set out by the financial institution i.e. the Bank of Canada. This includes putting in place a well-developed risk management system as well as keeping documents to prove compliance with the RPAA for a period of at least five years. 

Exclusions under RPAA registration 

Individuals and entities excluded 

The following individuals and entities are not subject to the RPAA registration: 

• Banks and authorized foreign banks, as defined by the Bank Act. 

• Credit unions, insurance companies, and trust and loan companies. 

• Agents and mandataries acting on behalf of Payment Service Providers (PSPs). 

• Payments Canada. 

• The Society for Worldwide Interbank Financial Telecommunication (SWIFT). 

Activities excluded 

Certain activities are also exempt from the RPAA, including: 

• Transactions conducted through automatic banking machines. 

• Internal transactions between affiliated entities. 

• Securities transactions executed by individuals or entities regulated under, or exempt from, Canadian securities legislation. 

RPAA registration process 

Step 1: Create an account in PSP connect 

• First, our specialists will help you set up your profile on the PSP Connect portal, which is imperative for registration in the RPAA. Not having this account means that the Payment Service Providers (PSPs) will not be able to finish the registration process.  

• Once the registration process opens, Tetra Consultants will then log on to PSP Connect to file your application and update your registration details. Tetra Consultants will assist you during the embedding process to avoid any hindrances when commencing the application process. 

Step 2: Gather necessary documentation 

• Once we have set up your account, Tetra Consultants will proceed with the collection of all necessary paperwork and information concerning your RPAA registration. We will assist in putting everything in order for submission, which is targeted within a 2 – 3 weeks period. 

Step 3: Complete the application 

• Moreover, we shall support you while filling in the registration form in the PSP Connect portal once the form is ready for application. Step by Step guide will be available to facilitate the application process, and our team will make sure that all of the information is provided in the correct form. 

Step 4: Pay registration fee 

• Subsequently, we shall assist you with the payment procedure associated with the one-time, non-refundable registration fee. This payment can be made through credit cards or electronic funds transfer, and we shall ensure it is done without hitches. 

Step 5: Submit application 

• After the completion of the application and the payment of the fee, we shall take care of the submission through the PSP Connect portal for you. We will provide you with an acknowledgement of receipt and we will take care of the submission to the Bank of Canada to ensure everything is well submitted. 

Step 6: Post-application process 

• Once the application has been turned in, our team will provide assistance to you while the review is being done by the Bank of Canada. Any questions raised by the relevant authorities will be attended to and will be communicated to you too.  

• Where applicable, national security reviews will be carried out by the Bank together with the Department of Finance Canada and Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for those meeting registration requirements. Before September 8, 2025, we will assist you in tracking the progress pertaining to the announcement of the list of noted PSPs and those who were denied registration. 

RPAA registration decisions 

• Following the end of the transition period, along with the lists of Registered Payment Service Providers and those refused or withdrawn Registration, with reasons for such actions, registration decisions shall also be posted on the RPAA website. 

• An application for Registration may be refused or Registration revoked according to the laws if  

• • a) an applicant or a PSP does not fulfill the requirements set for Registration;  

• • b) does not furnish any other requested information;  

• • c) provides any false or misleading statements;  

• • d) has discontinued retail payment operations; breaches the RPAA;  

• If the applicant does not pay the assessment owed on a yearly basis or makes it later than the deadline given. It should be noted that some registration decisions may consider information obtained from FINTRAC as well. 

• In addition, on the direction of the Minister of Finance registration should be denied or canceled for reasons of national security purposes applicable here include failure to provide information required, failure to comply with conditions imposed by the Minister, or sending information known to be false and misleading to the Minister. 

Documentations required for RPAA registration 

• Contact information: For all pertinent individuals, including subsidiaries and third parties. 

• Business structure: Ownership structure identified individuals holding key positions, as well as any creditors. 

• Payment functions: An overview of retail payment functions that are being carried out or are envisaged and the same is carried out by agents or affiliates. 

• End-user funds: Actual or expected value and volume of end-user funds held both in the country and outside it. 

• Risk management framework: Describe the existing or intended risk control and associated incident management measures. 

• Compliance records: All existing filing with FINTRAC or similar bodies. 

Cost for RPAA registration 

• Engaging Tetra Consultants to assist you with RPAA registration will incur a one-off registration fee which is non-refundable and is payable at the time of application submission to Bank of Canada. This non-refundable fee is applicable for all Payment Service Providers (PSPs) within the specific application window. Prior to commencing our engagement, we shall disclose all the fees involved for the purpose of transparency. 

• Tetra Consultants will break down the costs, indicating what each will cost to enable you to appreciate the costs involved in this. Upon the completion of the initial registration process, any additional annual assessment fee will be based on how active and the value of payments you make. This fee is subject to changes which we shall communicate after the registration process is complete. 

Conclusion 

• Tetra Consultants offers comprehensive assistance to Payment Service Providers throughout the RPAA registration process while ensuring compliance and a hassle-free application process. Our knowledge extends beyond RPAA registration as we are also able to provide a broad array of business services from corporate bank account opening to offshore financial licenses, digital marketing / SEO services, and others. This means by being in partnership with Tetra Consultants, you can concentrate on ensuring your business grows while we deal with the intricate processes of registration and compliance so that you achieve your objectives in the best way possible. 

• Contact us to know more about RPAA registration and our team will revert back in 24 hours.