The Globe and Mail reports in its Friday edition that the federal government has introduced a new law to begin regulating technology companies offering payment services.
The Globe's Mark Rendell and James Bradshaw write that the Retail Payments Activities Act will put the Bank of Canada in charge of regulating payment services providers in Canada that are not governed by another regulator, as well as foreign companies facilitating payments for Canadian customers.
It does not apply to domestic or foreign banks, credit unions or insurance companies that are already regulated in other ways. Instead, it is aimed at financial technology start-ups -- often called "fintechs" or "paytechs" -- as well as global technology giants such as Google and Apple that have made inroads in digital payments without robust oversight.
The new law comes at a moment when adoption and use of digital payments by consumers and small businesses has accelerated dramatically amid COVID-19. The tighter controls on start-ups are intended to make payments more secure and reliable for consumers.
They are also supposed to spur innovation and competition in payments by paving the way to bring fintechs into the country's payment systems.
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