What are the safeguarding requirements?

All Canadian Payment Service Providers subject to the Retail Payments Act are required to open a safeguarding account to hold end user funds. This requirement also applies to MSBs and FMSBs that are registered with FINTRAC and who hold client money. If your firm is a qualifying MSB/FMSB, then you will need to find a suitable safeguarding account.

What are the safeguarding account options?

There are three options available to you to meet the safeguarding requirement:

• Open a safeguarding account with a bank
• Open a safeguarding account in a trust account with a trustee
• Obtain a safeguarding insurance guarantee

Who can provide a safeguarding account?

There are several types of firm who are allowed under the Retail Payments Act, to provide a safeguarding account, but in simple terms it boils down to two types of entity:

• A Canadian bank, or
• A foreign financial institution that is regulated to the same standards as a Canadian bank

When it comes to trustees for the trust account, anyone can act as trustee for your firm, so long as the trust agreement is under Canadian law.

Where can I find a safeguarding account provider?

These can be challenging to find as the firms that qualify as being able to provide safeguarding accounts typically view Payment Service Providers (and in particular MSB’s/FMSBs) as being high risk and are therefore unwilling to open accounts for them.

Comment AuthoriPay peut-il vous aider ?

We have been helping Payment Service Providers across the UK and EU meet similar safeguarding requirements for many years and now we are bringing that expertease to Canadian firms.

We work with a network of banks and financial institutions who are willing to provide safeguarding accounts and we can guide you through their onboarding process.

In addition to this, we have a unique solution in which we can provide you with a compliant safeguarding trust account, acting as trustee with a major global bank. 

Comment puis-je percevoir des intérêts sur le solde de mon compte de sauvegarde, car j'ai un solde très élevé ?

We can provide a high interest bearing accounts for large balances in GBP, EUR and USD. 

Puis-je obtenir un compte de sauvegarde multidevises ?

Yes you can,  At present we can offer GBP, EUR, USD and CAD and working to add AUD in the near future.

We struggle to open bank accounts because they find us high risk

We work with many firms who have this problem and have always been able to find a solution for them. Our trust account solution is particularly helpful here.

A European e-money firm has offered me a safeguarding account, will that be good enough?

Sadly not, the account must be with a Canadian bank or foreign financial institution that is regulated to the same standards. Unfortunately, a European e-money firm is not likely to qualify.

That being said, you could use an e-money institution (or payment institution for that matter) as a payment processor in conjunction with another safeguarding account provider (for example our trust account above).

Comment s'appellent les comptes de dépôt de garantie dans les autres langues européennes ?

1. Français : Compte de Séquestre ou compte de Garantie
2. Allemand : Treuhandkonto oder Sicherungskonto
3. Espagnol : Cuenta de garantía o cuenta de custodia
4. Italien : Conto di Garanzia o Conto di Deposito
5. En portugais : Conta de Garantia ou Conta de Custódia
6. Néerlandais : Bewaarrekening of Zekerheidsrekening
7. Suédois : Förvaringskonto eller Säkerhetskonto
8. Danois : Sikkerhedskonto eller Varetægtskonto
9. Norvégien : Sikringskonto eller Deposittkonto
10. En finnois : Turvakäyttötili tai Vakuustili

What should I do next?

The requirement to obtain a safeguarding account came out in November 2024. If you haven’t opened a safeguarding account yet please get in touch asap and we can talk right away, or arrange a video call or meeting with your team. Alternatively, if you already have a safeguarding account and would like to explore other options, or are looking for a back up safeguarding account provider, then please contact us to see how we can help.

You can call or email us using the contact details below, or complete the get in touch form and we will get back to you.