Fintechs Canada has submitted a response to Payments Canada’s recent consultation on membership expansion, arguing that existing Bank of Canada requirements already provide robust safeguards for the payments system without need for additional entity-based restrictions.
The submission challenges section 32 of the Canadian Payments Association By-law No. 3, which currently blocks money market mutual funds, trust companies, and life insurance companies from becoming direct clearers on the Automated Clearing Settlement System (ACSS).
“The current approach creates unnecessary barriers to competition,” said Alex Vronces, Executive Director of Fintechs Canada. “Any institution capable of meeting the Bank of Canada’s stringent settlement account requirements has already demonstrated the financial stability and operational sophistication needed to participate safely in our payment systems.”
The association’s submission details how Bank of Canada settlement accounts require participants to maintain investment-grade credit ratings, pledge sufficient collateral, implement robust cybersecurity measures, and submit to continuous regulatory oversight—creating multiple layers of protection for the payments ecosystem.
Fintechs Canada also raises concerns about structural governance issues at Payments Canada, noting that despite government-led reform efforts dating back to the early 2000s, the organization continues to face criticism that its policies may reflect the interests of incumbent financial institutions rather than promoting broader system innovation.
“The persistent delays in launching Canada’s real-time payments system should raise questions about whether the current governance structure is delivering the modernization that Canadian consumers and businesses need,” Vronces added. “Removing arbitrary entity-based restrictions would be a meaningful step toward a more competitive, innovation-friendly payments landscape.”
To view Fintechs Canada’s submission, click here.
