Finopotamus Int'l: The RPAA Is Here. Now What?

Canadian PSPs have earned their seat at the payments table. The harder question is what to do with it.

Guest Editorial by Pamela Draper, President, DCPayments

For as long as most people in Canadian fintech can remember, accessing the country's payment rails meant going through a bank. You needed a sponsor. You needed their APIs, their timelines, their risk appetite. It was the price of admission and most payment service providers (PSPs) paid it without complaint, because it was the only game in town.

That game just changed.

Pamela Draper

As of September 2025, the Retail Payments Activities Act (RPAA) is fully in force. Payments Canada has opened its membership to registered PSPs for the first time in its history. The Real-Time Rail (RTR) is in the final stages of testing. And the federal government has committed to open banking, read access in 2026, and payment initiation by mid-2027. Canada's payments infrastructure is being rebuilt from the ground up, and PSPs are no longer tenants in someone else's building. They have the option to own.

The question is: should they?

The New Access Ladder and Why It Matters

It's worth pausing on how significant this moment is. In early 2026, Wise, Float, Paramount Commerce, KOHO, and Brim Financial became the first payment service providers to hold Payments Canada membership — sitting at the same table as chartered banks that have run this system for over a century. As Blakes LLP noted in their analysis of the membership expansion, previously fintechs had to access Canada's payment systems through bank intermediaries, often adding per transaction costs, complexity, and latency.

Direct membership, now available, has the potential to eliminate the middleman.

But here's what I want to say plainly to every PSP reading this: having the right to go direct does not mean going direct is the right decision for your business right now. These are different questions, and conflating them is one of the most expensive mistakes I see companies make.

Three Paths, Three Genuine Trade-Offs

When a PSP assesses its options in Canada's new landscape, there are three credible paths, each with honest advantages and honest costs.

The first is full direct participation: becoming a Payments Canada member, obtaining a settlement account with a willing and approved bank, and conduct your own (and potentially other PSPs') transactions on the RTR. This is the maximum-control option. You own your margin, your service-level agreements (SLAs), your product roadmap. You can even act as RTR payment facilitator for smaller PSPs, turning infrastructure investment into a revenue stream. But the requirements are significant. Providers of the required settlement accounts are still limited to a small number of banks and obtaining one is a significant hurdle for PSPs who still have not been warmly welcomed by larger banks in Canada. Additionally, direct Payments Canada membership demands stringent operational and financial standards. You need a 24/7/365 settlement funds availability from day one, ISO 20022 integration, and substantial capital. This path makes sense for scaled businesses with the infrastructure and team to match the commitment. It is not a shortcut to growth for an early-stage PSP.

What's often underestimated is the full weight of what you're adding to your own corporate structure when you go direct. Beyond the technical build, you're taking on dedicated compliance and legal resources to meet RPAA and RTR obligations, IT and development teams to maintain connectivity and handle incidents, and a monitoring function that operates around the clock — because the RTR does not sleep. Then there's the settlement liquidity requirement: funds held to settle transactions are capital tied up and unavailable for growth. Larger financial institutions can spread these costs across a substantial client base and absorb them efficiently. For most PSPs at an early or mid stage of growth, the numbers are harder to make work.

The second path is direct membership using a Connection Service Provider (CSP) for technical integrations and potentially settlement. This means joining Payments Canada and participating in the RTR, but using an approved CSP like a bank or qualified payments processor to manage the technical integration and ongoing connectivity. As above, a settlement bank is also required. Depending on the CSP selected, this could be the same institution. This route is genuinely compelling for mid-size PSPs. You get a seat at the table as a member, RTR access, and a credible path to growing into a full direct participant as your volumes warrant it and you decide it’s in your business’ best interest to make the required investment. The trade-off is dependency: your CSP’s reliability becomes your reliability. Their outage is yours. As Torys LLP has noted, PSPs remain accountable under the RTR legal framework for the obligations carried out by their service providers so choosing your CSP and settlement bank is a risk management decision, not just a commercial one.

The third path is staying indirect: accessing payment rails through a regulated banking or payments processing partner, as PSPs have always done, but now with cleaner contractual footing under the RPAA. For early-stage companies, niche-vertical players, and PSPs whose competitive advantage is the product that payments enable—not payments infrastructure itself—this is often the right answer. The economics of direct membership rarely justify the investment until transaction volumes reach meaningful scale.

The Choice Everyone Gets Wrong

The most common mistake I see PSPs make right now is treating the membership decision and the technology decision as the same decision. They are not.

A PSP can be a Payments Canada member and still use a processor's technical infrastructure for connectivity, fraud monitoring, and operational resilience. Or they can build their own technology and remain indirect. These decisions are independent, and the right combination depends on where you are in your growth trajectory.

I was on a panel at a recent conference and one of the things that clearly resonated with the room was the idea that this is not an all-or-nothing decision. You can start offering RTR access as a payment service through a partner and observe what the traction and uptake actually looks like for your customer base. You can become a direct member and use someone else's technology stack to connect. Or you can go the full distance — direct membership with your own proprietary infrastructure. You can also combine approaches and evolve over time. The relief in that room was audible. People had been approaching this as a binary choice when it isn't one.

Dina Vardouniotis, Principal at Payments+Partnerships said it best:

"Payments processors don't just process transactions, they provide necessary risk and fraud defence, as well absorb operational complexity. They serve as the foundational infrastructure between ambitious fintechs and the regulated industry within which they need to scale." 

That framing is exactly right. A well-matched processor relationship gives a PSP RTR-ready connectivity without building native ISO 20022 capability, fraud tooling that satisfies Payments Canada's centralized fraud requirements, and operational resilience that most PSPs cannot cost-effectively replicate until they reach significant scale. It's also a legitimate stepping stone: a processor with Payments Canada membership and existing settlement relationships can serve as the bridge while a PSP builds toward direct participation. And the practical upside is real: with the right processing partner, a PSP can be live on RTR in a matter of weeks — compared to the months or years required to apply for direct membership, complete certification, and build out the required technology infrastructure.

The Questions You Should Be Asking Right Now to Make Your Decision

I'm not here to tell you which path to choose. What I will tell you is that the window for making this decision thoughtfully is closing.

The RTR is set to launch later this year. Open banking will follow. The PSPs who are positioned on the rails when these systems go live will have a first-mover advantage in a market that has been waiting decades for real-time, data-rich payment infrastructure. The strategic question for every PSP leadership team is not whether to engage with this transformation. It is how to engage with it in a way that reflects your actual competitive position, your capital reality, and your product ambitions — not your aspirations about what you want to be in five years.

The most clarifying question I find myself coming back to in these conversations is this: what do you want to spend your scarce resources on? Do you want to invest them in getting approved by the networks and regulators, building the required compliance regimes, and standing up the technology for direct access? Or do you want to direct that capital toward your product, your customer experience, and your growth — and leverage a partner for the infrastructure layer? There's no objectively right or wrong answer. It depends entirely on what your business is actually trying to be.

The questions worth pressure-testing are direct: What is my core competitive advantage and is payments infrastructure part of it, or the platform for it? At what transaction volume do the economics of direct membership beat my current processing costs? Do I have the team to operate a 24/7/365 settlement environment? How does open banking change my calculus?

There is no universally correct answer. But there is a right answer for your business, built on honest self-assessment rather than either fear of complexity or appetite for prestige. The PSPs who navigate this shift best will be the ones who asked the hard questions early and moved deliberately.

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Pamela Draper is the President and CEO of Digital Commerce Payments and Pateno Payments Inc., each part of the Digital Commerce Group, a group of companies providing technology and development solutions in the payments space. Prior to joining the Digital Commerce Group, Pamela spent approximately 14 years with top tier Canadian banks, in the areas of corporate and investment banking. Most recently Pamela held the position of Director in BMO Capital Markets’ Equity Capital Markets group in Toronto where she was responsible for assisting North American corporate clients raising capital in public and private markets. Pamela obtained an Honours Business Administration degree from the Richard Ivey School of Business at the University of Western Ontario. Current voluntary positions include acting as a Director for the Canadian Blockchain Association for Women and for the Calgary Public Library Foundation.