Competition Bureau Releases Draft Fintech Recommendations For Policymakers

On November 6, 2017, the Competition Bureau (the "Bureau") published its report on the Canadian financial services sector and FinTech. The report examined a wide range of FinTech activities and focused heavily on retail payments and retail payments systems.

The Bureau observed that, while FinTech has a real potential to penetrate the retail payments space in meaningful ways, it identified a variety of barriers to entry, some attributable to regulation, and some not.

Those barriers not attributable to regulation include:

• Canadian consumer behaviour (including a high degree of trust in existing payment providers and methods) and market maturity.
• The impact of network effects and the need for economies of scale: a critical mass of users is required for a new retail payment system or method to gain acceptance in a market.