By OTTAWA (Reuters) – The Bank of Canada on Friday started registering payment service providers as part of a plan to bring them under its regulation and promote secure and reliable digital transactions.
Critics have often complained that Canada’s digital payment infrastructure is archaic when compared with some advanced countries such as the UK and Australia and lags even many developing countries.
“Today marks a big step toward giving Canadians added confidence in the safety and security of retail payment service providers,” said Ron Morrow, the bank’s executive director of payments, supervision and oversight.
A payment service provider, or PSP, is any company that helps people store or move their money electronically, such as PayPal (NASDAQ:PYPL) and Square. This encompasses businesses that offer digital wallets, provide point-of-sale terminals or facilitate cross-border money transfers.
Canada’s payment systems are mainly controlled by the big five banks, an arrangement that critics say has led to high fees and delays.
After the registration period, the central bank will evaluate all applications and the federal government will conduct national security reviews of the applicants.
Bank of Canada will publish a list of all registered PSPs on Sept. 8, 2025, from which time the regulations for managing risk and safeguarding funds will come into effect, it said.