Changes Proposed To The Oversight Of Retail Payments In Canada

This summer the federal Department of Finance released a discussion paper regarding the oversight framework for retail payment systems in Canada.   The paper proposes a number of changes to the way the retail payment systems in Canada are regulated.  These changes will be of particular importance to Fintech companies operating in the retail payments space as for some of these entities, the level of regulation could increase substantially.

Retail payments in Canada are currently subject to a patchwork of regulations with some players regulated heavily and others minimally.  In addition, regulation is often based on an "institutional approach" whereby regulations are based on the type of entity being regulated as opposed to the activities undertaken by that entity.   For example, banks and other federally regulated financial institutions are subject to detailed and complex regulations with respect to credit cards, deposits and other aspects of their payments'