From Registration to Regulation: The Coming RPAA Crackdown in Canada
Registration is only the beginning. The Retail Payment Activities Act (RPAA) will transform how Canadian PSPs operate, shifting from simple registration to continuous, evidence-based regulation. Those unprepared risk severe penalties, business disruption, and loss of trust.

Registration Is Only the Beginning
For many Canadian payment service providers (PSPs), the Retail Payment Activities Act (RPAA) has been treated as a distant milestone. The common assumption is that the real challenge is filling out a registration form and waiting for approval from the Bank of Canada. The truth is more sobering.
Registration is just the first step. Once approved, PSPs will move under an entirely new supervisory regime where the Bank of Canada will expect living, tested, and evidence-backed compliance frameworks. RPAA represents a transition from minimal oversight to ongoing regulatory monitoring.
What RPAA Really Means After Registration
Moving Beyond Static Policies
Many PSPs believe compliance ends with a policy binder and a filing cabinet. RPAA makes that mindset obsolete. The law introduces expectations that every key risk area is not only documented but operationalized and tested.
Under RPAA, PSPs must prove:
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Governance and accountability: A senior officer, often a Chief Risk Officer, must be directly responsible for risk management.
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Operational resilience: Cybersecurity, business continuity, disaster recovery, and vendor oversight are ongoing obligations.
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Fund safeguarding: Segregation of end-user funds, reconciliations, and financial protections such as trust accounts or insurance must be demonstrated.
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Transparency and user protection: End-users must have access to clear disclosures, complaint handling, and incident notifications.
This is the shift from registration to regulation.
Who Needs to Register Under RPAA?
Scope of the Act
RPAA applies broadly to payment service providers operating in Canada, including:
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Remittance companies
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FinTech startups offering wallet or payment solutions
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Payment processors and gateways
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International firms serving Canadian users
Common Misconceptions
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“We’re already registered with FINTRAC as an MSB, so aren’t we covered?”
No. MSB registration deals with AML/ATF obligations, while RPAA is a separate regime under the Bank of Canada. Overlap exists, but RPAA is focused on safeguarding, resilience, and user protection. -
“Crypto platforms are exempt.”
Not true. If crypto firms handle retail payments for Canadian users, they fall within scope.
The bottom line: if your business touches retail payments in Canada, RPAA likely applies.
The Cost of Getting It Wrong: Penalties and Enforcement Powers
Monetary Penalties
RPAA is backed by real teeth. Violations can trigger administrative fines of up to:
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1 million dollars per violation for most breaches
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10 million dollars per violation for serious or repeated non-compliance
Enforcement Tools
The Bank of Canada has broad powers, including
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Notices of violation and default
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Compliance orders
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Suspension or revocation of registration
Hidden Costs
Beyond monetary penalties, the reputational fallout can be devastating. A public enforcement action undermines user trust, jeopardizes bank partnerships, and disrupts investor confidence.
For PSPs, the choice is stark: build compliance into daily operations now, or face the fallout later.
Why Most PSPs Will Struggle
Resource Gaps
RPAA expects PSPs to maintain compliance programs equivalent to what banks have built over years. Yet many PSPs operate with lean compliance staff or none at all. Without a dedicated Chief Risk Officer, obligations such as risk registers, reconciliation oversight, and board-level reporting fall through the cracks.
Evidence Burden
Policies are meaningless without proof. RPAA requires that every control be evidence-ready. That means:
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Board minutes approving policies
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Logs of reconciliations
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Incident reports with escalation records
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Vendor due diligence files
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Training records for staff
Most PSPs underestimate the sheer volume of documentation required.
Global Entrants
International firms entering Canada often assume RPAA is “just another filing.” They copy-paste global policies without adapting them to Canadian supervisory expectations, a mistake that will not survive scrutiny.
The RPAA Readiness Framework PSPs Need
Governance and Compliance
PSPs must implement practical policies that ensure governance is actively maintained rather than just theoretical.
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Compliance Policy assigning CRO responsibilities
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Internal Audit or Compliance Review Policy setting review cadence
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Governance and Oversight Policy assigning board-level accountability
Without this, a PSP cannot credibly attest to the Bank of Canada that compliance is embedded in its operations.
Risk Management and Operational Resilience
RPAA requires a framework to identify, assess, mitigate, and monitor risks:
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Risk Management Policy with taxonomy, heat maps, and monitoring
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Cybersecurity Policy covering access, patching, logging, and response
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Business Continuity and Disaster Recovery Policy with RTOs and tested playbooks
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Vendor Risk Policy with due diligence and ongoing monitoring
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Incident Response Policy detailing detection, escalation, and notifications
The regulator will expect to see a Risk Management and Incident Response Framework (RMIRF) supported by registers, playbooks, and testing evidence.
Fund Safeguarding and Financial Protection
Safeguarding end-user funds is central to RPAA:
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Funds Safeguarding Policy outlining trust, insurance, or guarantee structures
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Segregation of Funds Policy with daily reconciliations and audit trails
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Liquidity and Settlement Policy with forecasts, stress tests, and financial controls
The evidence burden is clear: trust documents, reconciliation reports, and liquidity models must be available at all times.
Transparency and User Protection
RPAA shifts focus to end-users:
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Disclosure Policy with plain-language terms and fees
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Complaints Handling Policy with documented escalation and reporting
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Incident Notification Policy ensuring timely notices to users
Supervisors will expect disclosure templates, complaints logs, and notification evidence.
The Central Role of the Chief Risk Officer
RPAA explicitly expects a senior officer to be accountable for risk management and incident response. In practice, this means appointing a Chief Risk Officer or equivalent.
The CRO must:
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Maintain and update all RPAA policies
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Conduct quarterly risk reviews and deliver board reports
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Oversee safeguarding and reconciliations
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Validate user-facing disclosures and incident notices
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Support the annual compliance attestation package
Without CRO-level oversight, PSPs risk fragmented compliance, a recipe for supervisory findings.
A Typical Year Under RPAA Supervision
Remaining compliant is not static. PSPs should expect an annual cycle of obligations:
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Quarter 1: Gap refresh against new guidance, RMIRF update, vendor due diligence
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Quarter 2: Cybersecurity and disaster recovery tests, review of complaints and incidents
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Quarter 3: Fraud and operational risk reviews, incident simulations, policy updates
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Quarter 4: Annual attestation, evidence compilation, staff training refreshers
This cycle will be tested during supervisory reviews.
Implementation Roadmap for PSPs
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Gap Analysis: Map current controls against RPAA requirements
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Governance and Risk Drafting: Build governance and risk policies, establish an RMIRF
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Safeguarding and Transparency: Finalize safeguarding and user protection frameworks
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Integration and Adoption: Secure board approvals, train staff, embed compliance cycles
How AML Incubator Helps PSPs Stay Ahead
At AML Incubator, we specialize in helping PSPs move beyond registration and prepare for real regulatory supervision. Our services map directly to RPAA readiness:
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RPAA Registration Services: Filing support and gap analysis
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CAMLO and MLRO Services: Senior officer accountability
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Effectiveness Review: Evidence testing before regulators audit
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Regulatory Remediation: Closing gaps identified by audits or supervisory reviews
Our approach ensures that PSPs are not only compliant on paper but also evidence-ready for the Bank of Canada.
From Registration to Regulation
The RPAA represents a significant shift in Canadian payments regulation. What begins as a registration exercise quickly evolves into ongoing supervision. PSPs that fail to embed governance, safeguarding, resilience, and transparency into their operations will face the full force of Bank of Canada enforcement.
Errors can cost millions, cause reputational damage, and disrupt operations. The solution is accountability, evidence, and expert guidance.
AMLI is your trusted partner in regulatory excellence. If you are preparing for RPAA registration or strengthening compliance ahead of supervision, now is the time to act.