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The Future of Canadian Payments: A 2025 Compliance Perspective

As we look toward 2025, Canada’s payments landscape is undergoing a remarkable transformation. The numbers tell a compelling story: in 2023 alone, Canadians executed a staggering 21.7 billion payment transactions valued at $11.9 trillion, with credit transactions representing a third of total volume. This isn’t just incremental change – it’s a fundamental shift in how Canadians conduct business and manage their finances.

Digital is Now a Mainstay
The pandemic has permanently altered consumer behavior, accelerating the adoption of digital payments across the country. Digital payments now account for 86% of total payment volume and 75% of total payment value in Canada2. This trend is expected to continue, driven by contactless payments reaching 63% of all in-store transactions in 2023, a 17% increase from the previous year3.

Fresh Set of Compliance Challenges
For compliance professionals, this rapid evolution presents both challenges and opportunities. The regulatory landscape is becoming increasingly complex, with multiple regulatory bodies taking an active interest in the payments sector. The Retail Payments Activities Act (RPAA) and Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) are reshaping the regulatory framework, while organizations like the Financial Consumer Agency of Canada and FINTRAC are intensifying their oversight of payment services.

Artificial Intelligence
One of the most significant developments is the growing role of artificial intelligence in payment systems. AI has become a crucial tool in fraud prevention, helping financial institutions combat increasingly sophisticated schemes. However, this technological advancement brings its own compliance challenges. Compliance officers must now ensure their AI systems are not only effective but also responsible and compliant with emerging regulations.

Privacy and Data Protection
Privacy and data protection have taken center stage as well. As provinces continue to enact their own privacy laws, payment providers face the challenge of navigating a complex patchwork of regulations. The key to success will be developing comprehensive privacy frameworks consistent with Payment Card Industry Data Security Standard (PCI DSS) that can adapt to evolving requirements while maintaining the trust of consumers and merchants alike.

Consumer protection remains paramount, with the government placing increased emphasis on transparency in fees, charges, and overall service terms. The industry is also seeing a push toward enhanced financial literacy initiatives, recognizing that educated consumers are better equipped to make informed financial decisions.

What to Prepare For
Looking ahead to 2025, compliance professionals should prepare for several key developments.

  • Real-time payments capabilities are on the horizon, bringing new security and fraud prevention challenges.
  • Network compliance requirements are evolving, particularly around merchant category codes and fraud prevention measures.
  • The fight against financial crime is becoming more sophisticated, requiring enhanced due diligence and monitoring systems.

The evolving payments landscape demands a recalibration of compliance frameworks. While traditional AML protocols remain foundational, the integration of AI systems and real-time payment capabilities requires sophisticated governance models. The ETA’s Payments Compliance Conference – Canada, agenda reflects this complexity, featuring dedicated sessions on AI governance, regulatory enforcement protocols, and network compliance requirements.

Strategic Considerations
Success in this environment requires a dual focus: rigorous compliance architecture and dynamic risk management capabilities. Compliance professionals must develop frameworks that address both current requirements and emerging challenges, particularly in areas of AI implementation, money transmission, privacy protection, and real-time payment monitoring. The conference’s emphasis on advanced compliance sessions and network-specific requirements underscores this strategic imperative.