Canada is modernizing the regulatory and technological foundations of its payment ecosystem, with initiatives including the Retail Payment Activities Act (RPAA) and Real-Time Rail (RTR). As these changes take effect, payment service providers (PSPs) must navigate a new set of rules and exposures – making it essential to understand the evolving risks and how to mitigate them.
As compliance demands intensify and infrastructure upgrades alter how transactions are processed and secured, PSPs face a pivotal moment to reassess their risk strategies and build resilience for the future.
The RPAA: The first federal regulatory regime for non-bank PSPs
With Canadians increasingly relying on non-bank fintech apps to move and store money, the RPAA aims to bring these PSPs in line with the standards traditionally applied to banks. From 8 September 2025, PSPs involved in retail payments have been required to register with the Bank of Canada, marking a significant step toward formal oversight of this fast-growing sector.
The RPAA is designed to enhance the safety, security and efficiency of retail payments. Registered PSPs need to implement robust risk management frameworks and safeguard end-user funds through mechanisms such as trusts or insurance. In return, they gain access to Payments Canada and new infrastructure like the Real-Time Rail (RTR) system. For PSPs, this means not only adapting to new compliance obligations but also unlocking opportunities to participate in a more integrated and modernized payment landscape.
The RTR: Unlocking instant payments and smarter insights
The RTR is set to revolutionize how money moves in Canada, enabling instant, 24/7/365 digital payments between accounts. For businesses and individuals alike, this means faster payroll, bill payments and improved cash flow management – ushering in more flexible payment cycles and greater financial agility across the economy.
Built on the ISO 20022 messaging standard, RTR will also deliver richer transaction data, giving PSPs and their clients deeper insights into customer behavior and payment patterns. This enhanced data capability opens the door to smarter operations, personalized marketing and improved customer experiences – making RTR not just a speed upgrade, but a strategic asset for PSPs navigating Canada’s modernized payment landscape.
Evolving exposures PSPs must prepare for
As Canada’s payment landscape rapidly evolves, PSPs must stay informed about emerging risks and ensure they have the right protections in place.
CFC’s dedicated fintech packaged product is designed to help mitigate these exposures:
- Fraud escalation: Real-time payments increase the risk of fraud, as seen in the UK where APP fraud overtook card fraud. CFC’s crime cover protects against employee theft and third party and funds transfer fraud via social engineering, covering both PSPs’ first-party losses and their customers.
- Regulatory oversight: With RPAA enforcement, PSPs face new compliance demands. Our policy includes cover for regulatory investigations and pre-investigation costs.
- D&O liability: Increased investment and reporting requirements heighten exposure for leadership. CFC offers comprehensive directors & officers cover, helping leaders manage risk so they can focus on business.
- Cyber risk: RTR access means PSPs handle more sensitive data and higher transaction volumes. Our cyber cover includes proactive cyber security services to help prevent cyber incidents and incident response to aid recovery if the worst happens. It also offers business interruption support, vital if a PSP experiences downtime.
Protecting PSPs in a changing landscape
As key players in Canada’s evolving financial ecosystem, PSPs are facing a wave of new risks – from fraud and regulatory scrutiny to cyber threats and leadership liability. As the landscape continues to change, one thing is certain: robust insurance cover is an essential tool in combating risk.
To learn more about how CFC’s fintech packaged policy can help protect your business, get in touch with our team today.
