How To Apply To Get PSP Registration Under The RPAA

The Retail Payment Activities Act (RPAA) is a new federal regulation in Canada that’s changing how payment service providers (PSPs) operate. It’s all about making sure things are fair, secure, and that consumers are protected when they use payment services. If your business is involved in retail payments, you’ll likely need to get registered under this act. It’s a pretty big deal for the Canadian payment landscape.

Defining a Payment Service Provider Under the RPAA

So, what exactly is a Payment Service Provider (PSP) according to the RPAA? Basically, if your business performs certain functions related to electronic fund transfers, you might be considered a PSP. This includes things like:

Providing or managing accounts held for end-users.
Holding funds on behalf of end-users.
Starting an electronic funds transfer at someone’s request.
Authorizing or facilitating electronic fund transfers.
Offering clearing or settlement services.

It’s important to figure out if your business activities fall under this definition, as it determines whether you need to register. Even if you’re already registered as a Money Services Business (MSB) with FINTRAC, you’ll likely still need to go through the RPAA registration process if you’re performing these payment functions.

Identifying Activities Subject to RPAA Registration

Registration under the RPAA is required for entities that engage in specific retail payment activities. These activities are designed to cover a broad range of services that consumers interact with daily. The key functions that trigger the need for registration include:

Account Provision and Maintenance: If you offer or manage accounts that hold funds or information for one or more end-users, this activity is subject to registration.
Holding End-User Funds: Any business that holds funds on behalf of its end-users must register.
Initiating Electronic Funds Transfers (EFTs): If your service allows end-users to start an EFT, registration is necessary.
Authorizing or Facilitating EFTs: This covers businesses that authorize, transmit, or receive instructions for EFTs.
Clearing and Settlement Services: Providing services that clear or settle payment transactions also requires registration.

Foreign PSPs operating in Canada also need to register and must identify any agents or representatives acting on their behalf within the country. These agents will receive official notices and orders related to the RPAA.

Exclusions and Exemptions from RPAA Registration

While the RPAA has a broad scope, certain activities or entities might be excluded or exempt from registration. The goal is to focus on entities directly involved in retail payment activities that pose risks to consumers or the payment system. Generally, the RPAA is focused on retail payment activities, meaning services primarily used by individuals for personal or household purposes. Activities that are part of a larger, regulated financial service might also be exempt if they are already subject to comparable oversight. For instance, traditional banking services offered by federally or provincially regulated financial institutions might fall outside the direct scope of RPAA registration for those specific activities. It’s always best to consult the official guidance from the Bank of Canada or seek legal advice to confirm if your specific operations qualify for any exemptions.

Understanding these requirements is the first step. It helps you determine your obligations and prepare for the registration process. Getting this right from the start can save a lot of trouble down the line.

Navigating the PSP Connect Application Portal

The PSP Connect portal is your primary gateway for all interactions related to your Payment Service Provider (PSP) registration under the Retail Payment Activities Act (RPAA). This online platform is designed to streamline the application process and manage your ongoing compliance obligations. It’s important to familiarize yourself with its features before you begin.

Before you can submit any registration forms, you’ll need to establish a user account within the PSP Connect portal. This account serves as your secure login for accessing all services related to your PSP registration. You will be prompted to provide basic contact information to set up your profile. Make sure to use an official business email address and keep your login credentials secure.

Once your account is active, you can locate and access the official RPAA registration application form directly through the PSP Connect portal. The portal will guide you through the various sections of the application. It’s advisable to review the required information beforehand to ensure you have all necessary documents and details ready to complete the form efficiently.

The PSP Connect interface is structured to be user-friendly. You will find distinct sections for submitting new applications, updating existing information, and accessing communications from the regulatory body. The portal also provides access to relevant guides and resources to assist you throughout the registration process. Familiarize yourself with the layout to quickly find the information and tools you need.

The PSP Connect portal is the official channel for all RPAA registration activities. It is imperative to use this platform for submitting your application, making any necessary updates, and receiving official communications. Failure to use the designated portal may result in delays or rejection of your application.

Key functions within PSP Connect include:

Submitting your initial registration application.
Uploading supporting documentation.
Paying the prescribed registration fee.
Updating your business information post-registration.
Accessing compliance reporting tools.
Viewing communications and notices from the regulator.

Preparing Your RPAA Registration Application

Getting your application ready for RPAA registration involves gathering a lot of information and making sure it’s all presented correctly. It’s not just about filling out a form; it’s about showing you understand and can meet the requirements set out by the Bank of Canada. This preparation stage is quite important, so taking your time here can save a lot of hassle later on.

Gathering Essential Business Information

Before you even start filling out the online forms, you need to collect a good amount of data about your business. This includes basic contact details, not just for your main office but also for any third parties, agents, or affiliated companies that might be involved in your payment activities. You’ll also need to detail your business structure, who owns it, any debtholders, and information about your key personnel. Having all this ready beforehand makes the actual application process much smoother. You can find more details on what’s needed in subsection 29(1) of the RPAA.

Detailing Retail Payment Functions and Operations

This part requires you to clearly explain the retail payment functions your business currently performs or plans to perform. Be specific about how these operations work. If any agents or mandataries will be carrying out these functions on your behalf, you must include them in your description. It’s also important to provide figures for the volume and value of end-user funds you handle, both within and outside of Canada, and the number of end-users you serve. This gives the regulators a clear picture of your business scale and scope.

Documenting Fund Safeguarding and Risk Management Frameworks

One of the key aspects of the RPAA is how you protect end-user funds. You’ll need to describe the methods you use, or plan to use, to safeguard these funds. This could involve setting up trust accounts or segregated accounts, as mentioned in the regulations. Additionally, you must outline your framework for managing risks and responding to incidents. This shows you have a plan in place to handle potential problems and protect your customers’ money. Demonstrating a robust safeguarding and risk management strategy is a critical component of your application.

The RPAA mandates specific approaches to safeguarding end-user funds, often requiring funds to be held in trust or segregated accounts, potentially with insurance or guarantees. Applicants must clearly articulate their chosen method for meeting these requirements.

Here’s a quick checklist of what to prepare:

Contact information for your business, agents, and affiliates.
Details on business ownership, structure, and key staff.
A clear description of all retail payment functions.
Data on fund volumes, values, and end-user numbers (actual or projected).
Your plan for safeguarding end-user funds.
Your risk management and incident response framework.
Information on any existing registrations with FINTRAC or other regulatory bodies.

Remember, you’ll need to submit your application through the PSP Connect portal. Having all this documentation ready will make the process of filling out the application form much more efficient. The application fee is also a required part of the submission, so be prepared to pay that as well.

Submitting Your RPAA Licence Application

Once you have meticulously prepared all the necessary documentation and information, the next step involves formally submitting your application for a Payment Service Provider (PSP) registration under the Retail Payment Activities Act (RPAA). This stage requires careful attention to detail to ensure your application is processed without undue delay.

Completing the Registration Form Accurately

The core of your submission is the registration form, which you will access and complete through the PSP Connect portal. This form is designed to gather specific details about your business, its operations, and how you intend to safeguard client funds. It is imperative that all fields are filled out with accurate and up-to-date information. Any discrepancies or omissions could lead to delays or even rejection of your application. Pay close attention to sections detailing your retail payment functions, business structure, ownership, key personnel, and any agents or mandataries operating on your behalf in Canada.

Paying the Prescribed Registration Fee

A non-refundable registration fee is required at the time of submission. This fee must be paid in full. Currently, the registration application fee is set at $2,500 CAD. Payment can be made via credit card or electronic funds transfer directly through the PSP Connect portal. Your application will not be assessed until the Bank of Canada confirms receipt of the full payment.

Confirming Application Submission

After completing the form and making the required payment, you will be able to submit your application. You will receive an immediate confirmation through the PSP Connect portal acknowledging that your application has been received. It is important to note that once submitted, applications cannot be cancelled. Keep this confirmation for your records, as it serves as proof of your submission and the date it was filed. This date is significant, especially when considering the transition period and compliance deadlines under the RPAA.

It is your responsibility to ensure all information provided is truthful and complete. Misrepresentation can have serious consequences, including the potential refusal of your registration.

Fee Type	Amount (CAD)	Payment Method
Registration Application Fee	$2,500	Credit Card, EFT

Post-Submission and Review Process

After you’ve sent in your application, there’s a period where it gets looked over. You’ll get a confirmation that your application was received, usually through the PSP Connect portal. This confirmation means they’ve got it, and it’s officially in the queue for review. Don’t expect to cancel your submission at this stage; once it’s in, it’s in.

Receiving Application Confirmation

As soon as your application is processed by the system, you should see a notification. This is your official acknowledgement that the Bank of Canada has your paperwork. It’s a good idea to keep this confirmation handy for your records.

Responding to Information Requests

It’s pretty common for the review team to have follow-up questions. They might need clarification on certain points or additional documentation to fully assess your business. Be prepared to respond promptly to any requests for information. Delays in providing what they need can slow down the entire process. You can update your application details in PSP Connect if needed, even after submission.

Inter-Agency Consultations for Review

Your application isn’t just reviewed by one group. To get a full picture, the Bank of Canada will share relevant parts of your application with other government bodies. This includes the Department of Finance Canada for national security checks and FINTRAC for financial intelligence. This multi-agency approach helps ensure all aspects of your business meet regulatory standards.

This collaborative review process is designed to be thorough, covering financial, security, and operational aspects of your payment services. It’s a standard part of regulatory approval for financial entities in Canada.

If, for any reason, your registration is refused, you have the right to request a review. This review can be conducted by the Bank of Canada, and if you’re still not satisfied, you may have the option to appeal to the Federal Court. There are specific timeframes for requesting these reviews, so it’s important to act quickly if you receive an unfavourable decision. You can also submit a new application after any review process is completed, especially if there’s a change in control of your payment service provider.

Timelines and Compliance Deadlines

Understanding the key dates and deadlines for your Payment Service Provider (PSP) registration under the Retail Payment Activities Act (RPAA) is important. Missing these can lead to operational disruptions and penalties. The Bank of Canada has set out specific periods for application submissions and has established a transition phase to allow existing PSPs to comply.

The registration window for PSPs to submit their applications to the Bank of Canada is set to open on November 1, 2024, and will close on November 15, 2024. This two-week period is critical for all entities operating as PSPs in Canada.

Operating During the Transition Period

PSPs that are already providing retail payment services have a grace period to continue their operations while their applications are being reviewed. This transition period extends until September 7, 2025. However, to be eligible to operate during this time, your registration application must have been submitted within the initial November 1-15, 2024 window.

Consequences of Non-Compliance

Failure to submit a registration application within the specified November 2024 timeframe can result in significant repercussions. These may include:

Potential de-banking by financial institutions.
A 60-day operational freeze, halting your ability to conduct business.
Substantial fines imposed by the regulatory authorities.

It is imperative for all PSPs to be aware of these deadlines and to prepare their applications well in advance to avoid any disruption to their business operations. The Bank of Canada has provided the PSP Connect portal to facilitate this process, but timely submission is solely the responsibility of the applicant.

Post-Transition Review Period

Following the end of the transition period on September 7, 2025, the Bank of Canada will begin responding to the submitted applications. While the Bank is prohibited from informing applicants of their application outcome during the transition phase, expect to receive a decision starting September 8, 2025. The Bank of Canada may update these timelines based on feedback from their registration pilot, changes in the retail payments sector, or lessons learned during the implementation of the RPAA framework.

Post-Registration Obligations and Reviews

Once your Payment Service Provider (PSP) registration is approved under the Retail Payment Activities Act (RPAA), your obligations don’t end. Ongoing compliance is key to maintaining your registration and operating smoothly within Canada’s payment landscape. The Bank of Canada will continue to monitor registered entities to ensure adherence to the Act’s requirements.

Ongoing Compliance with RPAA Regulations

Registered PSPs are expected to continuously meet the criteria set out in the RPAA. This includes:

Maintaining the business information provided during the application process. Any significant changes, such as a change in control or ownership structure, must be reported and may require a new registration application.
Continuing to safeguard customer funds and manage risks effectively, as detailed in your initial application.
Complying with any reporting requirements mandated by the Bank of Canada, which helps in supervising the retail payment sector.
Paying the annual assessment fee to remain in good standing.

Failure to meet these ongoing obligations can lead to serious consequences, including potential refusal or revocation of your registration.

Annual Assessment Fee Requirements

To support the supervision and oversight activities conducted by the Bank of Canada, registered PSPs are subject to an annual assessment fee. The specifics of this fee, including the amount and payment due dates, will be communicated by the Bank. It’s important to budget for this fee and ensure timely payment to avoid any compliance issues.

Procedures for Application Refusal or Revocation

In certain circumstances, a PSP’s registration may be refused or revoked. This can happen if:

The PSP fails to meet the initial registration criteria or no longer meets them.
Additional requested information is not provided.
False or misleading information was supplied.
The PSP ceases to perform retail payment activities.
A violation of the RPAA occurs.
The annual assessment fee is not paid.

If your registration is refused or revoked, you have the right to request a review of the decision. This request must typically be made within 30 days of receiving the decision. The review can be conducted by the Bank of Canada, and in some cases, by the Minister of Finance. Following the review, there may be an option to appeal the decision to the Federal Court.

It is vital for PSPs to stay informed about any updates or changes to the RPAA regulations and guidance issued by the Bank of Canada. Proactive engagement with compliance requirements will help prevent potential disruptions to your business operations.

Should your registration be refused or revoked, you may be able to submit a new application after the review or appeal process is concluded, provided you address the reasons for the initial refusal or revocation.

After you’ve registered, there are still important steps to take. You’ll need to keep up with ongoing duties and periodic check-ins to make sure everything stays compliant. Staying on top of these requirements is key to maintaining your registration. Want to learn more about what’s needed after you register? Visit our website for a complete guide.

Frequently Asked Questions

Who needs to register as a Payment Service Provider (PSP) under the RPAA?

You likely need to register if you provide payment services that involve electronic money transfers in Canadian dollars or another official currency. This applies if you have a business in Canada or if you direct services to people or businesses in Canada. Some activities, like those done by banks or for specific business purposes, might be excused. It’s best to check the RPAA rules carefully or ask for help to be sure.

What is the PSP Connect portal and how do I use it?

PSP Connect is an online system created by the Bank of Canada. It’s where you’ll go to apply for your PSP registration, pay fees, and keep your information updated after you’re registered. You’ll need to create an account in PSP Connect before you can start your application.

What kind of information will I need to provide for my RPAA registration?

You’ll need to share details about your business, like who owns it, who runs it, and your contact information. You’ll also have to explain the payment services you offer, how you plan to protect customer money, and how you manage risks and deal with problems. Be ready to provide documents that prove these things.

How much does it cost to apply for PSP registration?

There is a one-time fee to apply for registration, which is $2,500. This fee cannot be refunded, and it must be paid in full when you submit your application. You can pay using a credit card or by electronic funds transfer.

What happens after I submit my PSP registration application?

Once you submit your application and pay the fee, you’ll get a confirmation. The Bank of Canada will then review your application. They might ask you for more information to help them understand your business better. They will also share your application with other government groups like the Department of Finance and FINTRAC for reviews.

What happens if I don’t register by the deadline?

If you are required to register and don’t submit an application by the deadline, you could face serious penalties. This might include fines or other legal actions. It’s important to apply on time to avoid breaking the law and facing consequences.