Fintechs Canada has formally responded to Payments Canada’s consultation on membership expansion, arguing that existing Bank of Canada requirements already ensure financial stability, making additional entity-based restrictions unnecessary.
The submission specifically challenges section 32 of the Canadian Payments Association By-law No. 3, which currently excludes money market mutual funds, trust companies, and life insurance firms from directly clearing payments 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 meeting the Bank of Canada’s stringent settlement account requirements has already demonstrated the financial and operational capacity to participate safely.”
Fintechs Canada highlights that Bank of Canada settlement accounts require participants to:
- Maintain investment-grade credit ratings
- Pledge sufficient collateral
- Implement robust cybersecurity measures
- Undergo continuous regulatory oversight
The association also raises governance concerns at Payments Canada, pointing to ongoing criticism that its policies favor incumbent financial institutions over fostering innovation.
“Delays in launching Canada’s real-time payments system raise serious questions about whether the current governance model is delivering the modernization that consumers and businesses need,” Vronces added. “Removing arbitrary entity-based restrictions is a crucial step toward a more open, competitive payments landscape.”
As Canada moves toward payments modernization, the call for greater inclusivity in direct settlement participation could have far-reaching implications for the country’s financial ecosystem.
