Morrow, a BofC veteran, took on the role in January, charged with oversight of financial market infrastructures, as well as supervision of PSPs, a new task for the bank handed down by the Retail Payment Activities Act.

With draft guidelines published, the government has recently closed out a consultation period. Responses will be published shortly but Morrow is clear that there is concern among PSPs about the burden of reporting requirements and says that the Bank is keeping that “top-of-mind” as it looks to strike the right balance and to work with the sector.

For example, on firms being expected to provide daily data, Morrow says that calls for that to be changed to monthly or quarterly could result in some changes to the draft.

“That said, yes, there’s going to be some burden associated with this regime. Yes, you will actually have to have an operational risk framework that you’ve written down.”

Morrow says that the firms he has spoken to welcome the regime and are happy to be a part of the regulated space and that the things being asked of them – such as having business continuity plans and ensuring cyber resilience – are “good for their business anyway”.

However, he notes that there is some “selection bias” in who he has spoken to and that it would be “naive to think that there weren’t some people operating outside of the legislation and regulations and, you know, they’ll have to adapt or exit the space”.

It is difficult for the Bank to get a true picture of the industry until it gets a “full look under the hood,” says Morrow. “If there are some broad trends within the industry or some broad practices that we think need to be changed, we’ll indicate that to the industry and expect them to make the appropriate changes.”

On the task facing the bank, Morrow says he has been talking to regulators from places including the UK, EU and Singapore to get a sense of the challenges. “But until the regime actually comes up and we see how well positioned people are vis-à-vis the requirements, it’s difficult for us to say ahead of time how challenging it's going to be for us to manage both the stock of existing PSPs and the flow of new entrants.”

Firms will have a significant amount of time to prepare for the changes facing them. The regulations are slated to be finalised by the autumn and companies should know exactly what they need to do at least a year before the regime goes live in mid-2025, says Morrow.

On enforcement, Morrow says that the Bank has a range of tools, including the ability to impose fines of up to $10 million, “but our expectation is that…most people want to be in compliance with the regime,” and that “our whole thinking behind enforcement is not to punish anyone, it’s to incent compliance”.

With Canada also nearing the launch of its Real-Time Rail (RTR) payments system, the country is also laying out the rules for PSP direct access. To become direct members, firms will need to be supervised by the Bank and to be a member of Payments Canada.

Enabling this direct access and bringing in new entrants “is an important source of innovation, we think it's going to deliver better outcomes for Canadians”.

Companies will need to meet several criteria to get access, “but," says Morrow "I expect there will be a good number of people who will be able to meet those standards”.