By-law Amending the Canadian Payments Association By-law No. 1 — General: SOR/2025-199

Canada Gazette, Part II, Volume 159, Number 21

Registration
SOR/2025-199 September 26, 2025

CANADIAN PAYMENTS ACT

The Board of Directors of the Canadian Payments Association makes the annexed By-law Amending the Canadian Payments Association By-law No. 1 — General under subsection 18(1)footnote a of the Canadian Payments Act footnote b.

Ottawa, July 24, 2025

Garry Foster
Chairperson of the Board of Directors of the Canadian Payments Association

The Minister of Finance, under subsection 18(2)footnote a of the Canadian Payments Act footnote b, approves the annexed By-law Amending the Canadian Payments Association By-law No. 1 — General, made by the Board of Directors of the Canadian Payments Association.

Ottawa, August 25, 2025

François-Philippe Champagne
Minister of Finance

By-law Amending the Canadian Payments Association By-law No. 1 — General

Amendments

1 The definitions payment service provider and stakeholder in section 1 of the Canadian Payments Association By-law No. 1 — General footnote 1 are replaced by the following:

payment service provider
means a person that supports the operation, maintenance and development or enhancement of payment systems that directly or indirectly interface with the national clearing and settlement systems. (fournisseur de services de paiement)
stakeholder
means a person that is a user or a payment service provider or represents the interests of a group of users or payment service providers, but is not a member. (intervenant)

2 The By-law is amended by adding the following after section 2:

Payment Service Providers

Requirement for membership

2.1 A payment service provider referred to in paragraph 4(2)(i) of the Act must be registered, as defined in section 2 of the Retail Payment Activities Act, to be a member under that paragraph.

3 (1) Paragraph 4(e) of the By-law is replaced by the following:

(2) Section 4 of the By-law is amended by adding the following after paragraph (f):

4 (1) Subsection 10(1) of the By-law is replaced by the following:

Maximum number of members

10 (1) The Stakeholder Advisory Council is to be made up of no more than 20 individuals, of which at least one but no more than two must be elected directors of the Association.

(2) Paragraph 10(2)(a) of the By-law is replaced by the following:

(3) Paragraph 10(2)(b) of the English version of the By-law is replacing by the following:

5 The portion of section 11 of the By-law before paragraph (c) is replaced by the following:

Eligibility — criteria

11 Every individual appointed to the Stakeholder Advisory Council, other than an elected director of the Association, must

6 The portion of subsection 12(1) of the English version of the By-law before paragraph (a) is replaced by the following:

Evaluation of nominees

12 (1) In consultation with the Minister of Finance, the Board must evaluate each eligible nominee and, in doing so, must

7 Paragraph 14(c) of the English version of the By-law is replaced by the following:

8 Subsection 18(1) of the By-law is replaced by the following:

Maximum number of members

18 (1) The Member Advisory Council must be made up of no more than 20 individuals, of which no more than two may be elected directors of the Association.

9 Subsection 19(1) of the By-law is replaced by the following:

Eligibility — criteria

19 (1) Every individual appointed to the Member Advisory Council, other than an elected director of the Association, must be a director, officer or employee of a member and must represent the interests of that member.

Coming into Force

10 This By-law comes into force on the latest of

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the By-law.)

Issues

Amendments to the Canadian Payments Association By-law No. 1 — General (the By-law) are being made to reflect legislative amendments to the Canadian Payments Act (the Act). The By-law amendments will support expanded membership eligibility, maintain the representative character of the Stakeholder Advisory Council (SAC) and reflect amended definitions in the Act.

Background

The Canadian Payments Association (doing business as Payments Canada) is a statutory corporation with a mandate to establish and operate national systems for the exchange, clearing and settlement of payments between its members. The Act defines the mandate, duties and governance structure of Payments Canada. Further, the Act identifies the entities required or entitled to become members. Entitled members may choose to become members of Payments Canada. However, they are not obligated to do so. Only members are eligible to apply for participation in Payments Canada’s systems.

Amendments to the Act will expand eligibility for Payments Canada membership to payment service providers (PSPs) supervised by the Bank of Canada under the Retail Payment Activities Act (RPAA) regime; credit union locals that are part of a credit union central; and operators of clearing and settlement systems designated under the Payment Clearing and Settlement Act (PCSA) and overseen by the Bank of Canada.

The amendments to the By-law will

Objective

With legislative amendments to expand membership eligibility, the objectives of the amendments are to

  1. require new entitled members to provide evidence of their eligibility to align with current membership application requirements;
  2. allow entitled members that are not Payments Canada members to be eligible for the SAC to ensure continued representation of non-member payment service providers; and
  3. reflect technical amendments to the Act.

Description

In preparation for the establishment of new entitled member categories, amendments are made to introduce a membership requirement that a payment service provider must be registered in accordance with the RPAA and must provide evidence of their registration as part of their application for membership. Additional amendments are made to require that a clearing house provide evidence that the clearing and settlement system is designated under the PCSA, and that a credit union local provide evidence that they accept deposits transferable by order in their respective membership applications.

As it relates to eligibility for the SAC, amendments are made to allow entitled members that are not members to be eligible for the SAC to maintain representation by payment service providers and payment system users, as set out in the Act. The SAC provides advice to Payments Canada’s Board and contributes to proposed initiatives and policies that may impact third parties or the broader Canadian payment ecosystem.

Minor consequential and technical amendments are made to update wording to reflect the revised wording in the Act, including to align with the amended definition of “person” in the Act, and to correct typographical errors and address discrepancies between the French and English By-laws.

Regulatory development

Consultation

In developing the amendments, Payments Canada consulted its regulators, members and stakeholders, including targeted consultation conducted with entities that will be newly eligible for membership and its Member Advisory Council, its Legal and Policy Group and the SAC. Entities engaged showed strong support for the policy proposals and amendments.

A 30-day public consultation was held between February 4 and March 6, 2025, seeking views on the policy proposal to introduce a membership requirement that payment service providers be registered in accordance with the RPAA and provide evidence of their registration in their application for membership. Views were also sought on the policy proposal to allow directors, officers, or employees of entitled members to be eligible for the SAC in order to preserve its representative character. The consultation revealed strong support for the policy proposals from members, new entitled members (credit union locals, payment service providers, and clearing houses), and consumer groups. No concerns were raised with respect to the proposed amendments.

Modern treaty obligations and Indigenous engagement and consultation

Payments Canada determined that the proposal would not have modern treaty implications and is not expected to result in specific impacts to Indigenous communities. As a result, specific Indigenous engagement and consultations were not required.

Instrument choice

There are no instrument alternatives available for Payments Canada. The amendments must be made by way of a by-law amendment.

Regulatory analysis

Benefits and costs

The amendments require that new entitled members demonstrate that they meet the applicable eligibility requirements in their applications for membership. Payments Canada would otherwise need to contact and receive information about each applicant from the applicant’s regulatory authority. Therefore, the amendments will reduce the administrative burden on Payments Canada when confirming eligibility for membership, as set out in the Act.

Additionally, the amendments ensure that the SAC continues to be representative of non-member payment service providers and users, as required in the enabling legislation.

The amendments do not involve any costs to the Government or taxpayers. Payments Canada is a statutory corporation (non-share capital) created by an Act of Parliament. It operates on a not-for-profit basis and recovers its costs through transaction fees and common service dues levied on members.

The amendments are not expected to have significant cost implications for the Canadian payment ecosystem. The requirement for new entitled members to provide evidence of their eligibility in their applications for membership will introduce a minor administrative burden for entities that elect to apply. The other amendments will not introduce additional costs or regulatory burden.

Small business lens

Analysis under the small business lens determined that the amendments are unlikely to impact small businesses. Small businesses that are payment service providers may choose to apply to become a member of Payments Canada, and they would be subject to a nominal additional administrative cost as a result of the amendments. Based on current interest and the number of small business payment service providers, the annualized value of the net impact on small business applicants would be $0.

The amendments may have a positive impact on small businesses in Canada by supporting expanded membership and system participation of regulated entities, which has the potential to promote competition and better financial services, including those for small businesses; and enabling SAC representation for non-member payment service providers that are small businesses or offer services to small businesses.

One-for-one rule

The one-for-one rule applies since there is an incremental increase in the administrative burden on businesses captured under the amendments to the Act. The amendments are considered a burden “in” under the rule, and no regulatory titles are repealed or introduced.

As per the Red Tape Reduction Regulations, the assessment of administrative impacts was conducted for a period of 10 years commencing from registration. All values listed in this section are present in 2012 dollars, discounted to 2012 at a rate of 7%.

The amendments related to requiring new entitled members to provide additional information to Payments Canada in their application for membership represents an annualized cost of $110 for affected businesses. An anticipated 66 businesses would spend an additional 30 minutes to an hour to complete the task once as part of the application. The average wage (including overhead) of the responsible individual is estimated to be $32.26/hour. The annualized administrative impact per business would be $0.04.

Regulatory cooperation and alignment

The amendments are not related to any commitments with regard to regulatory cooperation or alignment.

Effects on the environment

No environmental or economic effects have been identified.

Gender-based analysis plus

No impacts based on gender and other identity factors have been identified.

Rationale

The amendments are required to align with recent changes to the Act and to ensure that the By-law contemplates new entitled members. This will achieve the stated objectives.

Implementation, compliance and enforcement, and service standards

The amendments to the By-law come into force on the later of the day that sections 219 to 228 of the Fall Economic Statement Implementation Act, 2023 come into force; the day when section 25 of the Retail Payment Activities Act comes into force; or on the day it is registered. Payments Canada is responsible for ensuring that its members comply with the by-laws, as applicable. The amendments do not require any new mechanisms to ensure compliance and enforcement.

Contact

Gillian Carter
Director, Assistant Corporate Secretary and Senior Legal Counsel
Canadian Payments Association
Constitution Square, Tower II
350 Albert Street, Suite 800
Ottawa, Ontario
K1R 1A4
Email: gcarter@payments.ca