Are you a PSP under the RPAA? The five payment functions

The definition has two limbs. Limb one: at least one payment function - the five in the table below - performed in relation to an electronic funds transfer. Limb two: performed as a service or business activity that is not incidental to another (RPAA s. 2). Both limbs are functional: the Act ignores labels - software company, marketplace, payment facilitator, crypto platform - in favour of what actually happens to funds and payment instructions.

The currency scope is wider than most summaries allow: a retail payment activity is a payment function performed in relation to an electronic funds transfer in the currency of Canada or another country, or using a unit that meets prescribed criteria (s. 2). Reading that as a blanket digital-currency carve-out compresses it too far - a platform whose users hold Canadian-dollar balances or trigger fiat transfers is performing payment functions, whatever asset trades alongside.

Performing a function is not enough: it must amount to a service or business activity that is not incidental to another. The Bank's registration criteria policy gives the working test: a function is more likely incidental "if you perform it exclusively to sell your own products and services that are not themselves payment related". Three factors pull the other way, towards registration: direct revenue from the payment function, end users reasonably expecting a payment service from you, and marketing of the payment service itself.

The classic contrast: a subscription software business collecting payment only for its own product sits on the incidental side; a platform that moves money between third parties, prices that movement and advertises it has made payments the business. The policy carrying these readings was last updated on 29 June 2026 - re-check the current version on the Bank of Canada's website before relying on it.

The Act applies to a PSP with a place of business in Canada (s. 4) - and, under s. 5, to a provider with none that performs for end users in Canada and directs retail payment activities at persons in Canada. The Bank's criteria policy lists the directing indicators: marketing aimed at Canada, a .ca domain, Canadian business-directory listings, agreements with Canadian entities, services offered in Canadian dollars, and a high proportion of Canadian end users.

The foreign limb is not theoretical: head offices among registered PSPs on 11 July 2026 included the United States (130), the United Kingdom (34), Singapore (6), Latvia (4) and the United Arab Emirates (3). Section 5 requires no Canadian place of business - though a foreign applicant must name a Canadian agent or mandatary authorised to accept notices.

Section 23 is blunt: a payment service provider must be registered with the Bank before it performs any retail payment activities. In force since 16 November 2024, its contravention is designated a very serious violation in the Regulations' schedule (SOR/2023-229, Schedule, Part 1). Administrative monetary penalty ceilings: $1 million for a serious violation, $10 million for a very serious one.

Two precisions the consultancy layer blurs. First, this is an administrative monetary penalty regime - descriptions of criminal prosecution for unregistered retail payment activity do not match the Act and Regulations as published. Second, enforcement is live: temporary and compliance orders against XTM Inc. in February 2026; an announcement on 12 June 2026 that notices of violation will be published; three registry entries carrying violation flags on 11 July 2026, though no notice of violation had been published by that date. Refusals and revocations are public with reasons - 40 and 14 respectively on the same date. The counts drift; verify them on the Bank's registry.

If the definition were settled, the Bank would not keep writing policy about it. In December 2025 it published a dedicated supervisory policy for online marketplaces, with case scenarios - regulator-grade proof that the scope frontier is still being drawn. A marketplace that collects buyer funds and pays sellers later should start its self-assessment there, not from a generic scope summary.

The registration criteria policy itself was last updated on 29 June 2026. Both documents are moving targets: check the current versions on the Bank of Canada's website before relying on any interpretive reading, including ours.

Registration is registration: the entry on the Bank's public registry is not a licence and certifies no approval of the business model. It confers no passport - a Canadian PSP registration grants no market access anywhere else, and no foreign authorisation substitutes for it. The mechanics: an application through the Bank's PSP Connect portal with a non-refundable $2,500 fee (CPI-indexed by formula; still flat $2,500 per the Bank's January 2026 FAQ), a completeness review, then the Minister of Finance's national-security screening - the only statutory clocks: 60 days to decide whether to review, extendable by 60; 180 days for a full review, also extendable. The Bank then registers "as soon as feasible" - no end-to-end service standard exists, and nobody can guarantee a decision date. Annual assessment fees were not yet charged as of 11 July 2026, the cost-recovery formula still pending - an unknown future cost, not a promise of free supervision.

Two adjacent points. FINTRAC and Bank of Canada registration are separate, cumulative regimes - the MSB-specific companion to this article maps when an MSB also needs the Bank. And buying a registered PSP does not skip the queue: s. 24 requires a new, acquisition-adjusted registration application before closing, screened the same way.