How fintech is developing in Canada


Nowadays financial data protection and regulation of privacy policies are greatly influencing the development of the fintech sector in Canada. One of the most relevant future factors that add to the development of this sector is the introduction of data mobility rights, which will theoretically allow individual consumers to transfer their data to a suitable fintech company that they may choose. Such a right, which provides access to valuable consumer data, would allow these fintech organizations to compete more effectively with traditional banks, thereby greatly improving the flexibility, precision and adaptability of their services.

Canadian privacy and data protection laws require companies to maintain equal levels of protection, regardless of whether the company operates internationally or only in Canada. However, organizations that operate internationally may face different problems with following various data protection rules and maintaining trans-national personal data transfer channels. As a result, while retail payments in Canada become more and more info-rich, there is a real possibility of the introduction of additional rules on processing payment information.

The current regulatory framework doesn’t allow PayTech companies — the most significant part of fintech companies operating in Canada — to gain direct access to the main Canadian retail payment system — Automated Clearing Settlement System (ACSS). Access to it is granted only to the members of Payments Canada and is regulated under Canadian Payments Law. Membership of this institution was recently greatly expanded, but it still remains limited only to the «traditional» financial institutions, such as banks, trust and credit companies.

Two supervisory bodies

Supervision in Payments Canada is carried out by two bodies: the Bank of Canada and the Canadian Ministry of Finance. The Bank of Canada, while executing supervisory functions, aims to ensure the continuity of payment-making processes and to increase availability of financial services. The key role of the Bank of Canada is the prevention of payment systems continuity being violated by applying preventive measures.

Payments Canada began a modernization program in 2016 in order to meet rapidly changing consumer needs, driven by the widespread acceptance of technological innovations. The program is an ongoing project aimed to establish a payment system that will be fast, flexible, secure, and reliable. 

Several payment systems are now being created as part of Payments Canada’s initiatives, the first of which is Lynx — a large-amount payment system that will replace the existing large-amount transfer system. Thanks to the upgraded infrastructure, banks and credit unions will be able to transfer big sums of money more quickly and safely. The system was launched on September 1st 2021, with almost C$ 500 billion processed in the four months following.

Several regulatory actions supporting the adoption of electronic payment methods have been implemented. Payments Canada’s Rule E5 (exchange of debit payment positions with deferred authorisation at service points for clearing and settlement purposes) went into effect in January 2020. This rule allows debit cards to be accepted more widely at points of sale, removing the requirement according to which sellers must have a permanent online connection to accept debit payments. It’s designed to allow people to pay with debit cards for multiples of low-cost transactions, such as public transport fares.

Ongoing talks on open banking, which might involve individuals and businesses who allow third-party service providers to initiate payments on their behalf, is another regulatory initiative giving rise to speedy electronic payments. The benefits of open financial services were planned to be discussed with stakeholders but were postponed due to the COVID-19 epidemic. The meetings finally took place in 2021.

Leading fintech sectors in Canada


  • providing technologies for all parties involved in accounting, tax accounting and managerial accounting.
  • using technologies to provide these services directly to the end-user. 
  • Bench Accounting synchronizes with a company’s accounting books and employs professional accountants for the creation of financial reports.

Blockchain and cryptocurrency

  • providing players who offer financial services with blockchain technology.
  • using blockchain technology for providing these services and products directly to the end-user. Companies that provide cryptocurrency trading, storage, and those that may use it, are included in this section; but companies that operate with crypto assets that are not related to financial services (such as NFTs) are excluded.
  • KNØX Custody sells solutions for insured crypto assets and cryptocurrency storage. 

Trading and financial markets

  • providing technologies for capital market participants, allowing them to widen or replace the processes of securities emission, trading, and/or for clearing and calculation purposes.
  • using technologies for providing these services directly to the end-user. Alternative trading systems and communicative cloud software for those engaged in the securities market are among the services provided by the fintech companies represented in this particular sector.
  • Overbond provides cloud-based communicational and analytical solutions for the bond market, allowing dealers and investors to contact directly corporate and government issuers. 

Digital banking and financial infrastructure

  • providing a white-label technology infrastructure for banks.
  • using technology to supply end users with financial infrastructure and banking applications (for example, APIs).
  • Flinks is a financial data aggregator that provides APIs, allowing fintech companies to connect to their users’ financial data.

HR, wages and benefits

  • providing technologies for the automatization of HR management, including payrolls and benefits calculation, together with personnel register administration.
  • using technology to deliver these services to end users directly. Companies that provide complete HR solutions that include financial benefits, as well as companies that manage financial benefits, belong in this category.
  • Collage is a cloud platform that automates personnel management and benefits for Canadian enterprises, offering, among other things, solutions for employee accounting, group benefits and payroll.


  • companies in this sector offer technologies that enable lenders to provide credit products directly to end users throughout the value creation chain (underwriting, monitoring, distribution, administration, and so on).
  • this category excludes companies that provide mortgages and real estate loans, which are included in the «real estate» sector.
  • Found Through provides small businesses with transparent financing and factoring of receivables. 

Payments, invoicing and money transfers

  • providing technology to financial services sellers and participants to enable B2B, B2C, and P2P payment flows.
  • Soundpays uses inaudible sound waves that can implement mobile wallets functions in mobile devices.

Personal finance

  • companies in this subcategory allow consumers to save money, track bills, and invest.
  • Koho offers Canadians a mobile current account with an integrated app and a top-up Visa card that allows them to receive real-time personal financial information.

Real estate

  • providing technologies that allow real estate market people to act throughout the whole value creation chain (investment, management, mediation, lending, leasing, etc.).
  • employing technology to deliver real estate-oriented services directly to end users.
  • RentMoola, for instance, is a global online payment network that lets tenants pay rent and apartment owners pay condominium fees with a credit/debit card or a direct transfer.

Regulatory technology

  • companies in this category provide technologies that enable businesses to meet compliance requirements, assure the availability of risk management protocols, and install controls for active risk reduction. Firms in this sector can supplement existing compliance, audit, and risk management workflows and/or use workflow automation technologies.
  • Trulioo, which is a global identity and business verification company providing secure access to independent data sources all over the world to authenticate individuals and businesses on the Internet.

Wealth management

  • сompanies in this sector provide technology to capital management firms and consultants in order to ensure alternative brokerage services with a full range of facilities, including better customer attraction, and/or automated and semi-automated investment consulting. 
  • d1g1t is an analytics — based digital capital management platform that provides portfolio management services and risk reports for consultants and their individual investors.


It’s important to note that the Canadian fintech sector is greatly diversified and is involved in a whole range of projects. New companies appear and now, thanks to the improved regulatory climate, they take to their respective markets relatively fast. Moreover, it’s an interesting example of companies exploiting one set of technologies in different business spheres where traditional brick-and-mortar financial organizations have no place. 

However, it may be difficult for fintech companies to participate in the Canadian market because the current regulatory framework was not designed with modern fintech functional capabilities in mind. As a result, evaluating whether the new legislation applies to them may be challenging. On the other hand, further legislative initiatives have just been introduced, which hints at the long-awaited certainty on regulation. 

The projected framework of data mobility, in accordance with the Law on Consumer Privacy Protection, as well as the structure of operational risk management and incident response in accordance with the Retail Payments Act, are perhaps the most relevant of these for fintech enterprises. Both pieces of legislation will be critical in formalizing fintech companies’ role in the Canadian financial services sphere.

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