Why Canada is a Good Place for Payment Institutions and Other Fintechs

According to PwC Canada, the FinTech sector in Canada is highly unique due to how Canadians perceive big banks. Canadian consumers are highly trusted in Canada, which leads many fin-tech start-up companies to explore collaboration options with these big banks. Unlike other markets in Canada there is a collaboration between startups and big banks, allowing them to gain access to their customer base and relationships.

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According to Accenture, there are nearly 700 FinTech across the country, 60% of which reside in theprovince of Ontario, with many of the them occupying Toronto and the Kitchener-Waterloo corridor.

The Payments, Lending, Back Office, and Digital Currencies verticals are still amongst the largest by number of Canadian FinTech.

The Canadian government happily embraces foreign business investment. The Canadian government has a number of immigration programs specifically designed for foreign investors and business owners.

Canada’s overall tax rate on new business investment is significantly lower than that of other G-7 countries. There is no foreign exchange control in the country. No restrictions are imposed on borrowing from abroad; the repatriation of capital; or the ability to remit dividends, profits, interest, royalties, and similar payments from Canada.

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Despite the challenges brought about by the global pandemic, 2020 remained an exciting year for the Canadian FinTech sector. As the ecosystem evolves, new partnerships are being forged and international recognition is on the rise.

In May 2021 the Government of Canada has introduced legislation to regulate FinTech companies that offer payment services in the country.

The draft legislation, titled the Retail Payments Activities Act (RPAA) and released as part of Bill C-30, aims to implement the previously announced federal retail payments oversight framework, which was first outlined in 2017. Bill C-30 has passed first reading in the House of Commons.

The legislation aims to “foster competition and innovation in payment services by building confidence in the retail payment sector.”

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At PayCompliance, we have 18 years’ experience of supporting the success of payment institutions across 65 countries. Our comprehensive product range includes consulting, financial auditing and licensing services.

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