End-user funds under the RPAA

If a Canadian payment service provider holds a balance for you, the Retail Payment Activities Act governs how it must do so. This is the part of the regime that decides what happens to your money on the worst day, so it is worth understanding precisely rather than approximately.

What the regime requires

Where a PSP holds end-user funds, the RPAA requires those funds to be kept apart from the provider’s own operating money and protected. In practice that generally means:

• held in an account at a regulated financial institution, maintained for that purpose, or under an equivalent protective arrangement;
• records that identify whose money is whose, so a balance can be attributed to an end user rather than sitting in an undifferentiated pool;
• arrangements intended to make those funds reachable by end users if the provider fails, rather than falling into the pot available to its general creditors;
• not used by the provider for its own purposes.

That is the shape of it. What follows is what it is not, because that is where the expensive misunderstandings live.

It is not deposit insurance

The single most important sentence on this page: segregation is not insurance.

A registered PSP is not a bank. CDIC deposit insurance does not apply to funds held with one. The RPAA protects your money by keeping it separate and identifiable, not by guaranteeing it.

Those are genuinely different protections. Segregation is designed so that your money is yours and can be identified as yours. Insurance is a promise that you are made whole regardless. The RPAA offers the first and not the second.

This matters because the language around it is easy to blur, and blurring it is reassuring. A provider that describes a payments registration in banking terms, or lets “protected” drift into “guaranteed”, has told you something about how it will describe everything else. Ours is a registration; we are not a bank; there is no deposit insurance.

A word about the word “safeguarding”

Canada’s regime is about safeguarding end-user funds, and that is the RPAA’s own terminology. We use it here because it is the correct Canadian term.

Read across jurisdictions with care, though. In the United Kingdom, “safeguarding” is a defined term under that jurisdiction’s payments regime, carrying specific meaning about specific permissions. We deliberately avoid it in UK-facing marketing copy, where it could imply a status we do not hold — our UK-facing pages say client funds are held in segregated accounts rather than “safeguarded”.

Same word, different legal weight, two regimes. If you are comparing a Canadian PSP against a UK one, do not assume the word means the same thing in both places, and do not assume a provider using it in the UK sense actually holds what that implies.

Crypto balances are usually outside all of this

The gap most often missed: fund-protection regimes are written for fiat.

Digital-asset balances generally sit outside them, governed instead by custody arrangements and network risk — irreversibility, key management, chain-level failure. The fiat treatment does not carry across simply because both balances appear on the same screen.

So read the digital-asset section of any provider’s terms specifically, including ours. If a provider’s marketing implies one protective framework across both, that is worth pressing on before you hold a material balance rather than after.

Questions worth asking, in writing

1. Where exactly are end-user funds held — which type of institution, in whose name?
2. How are they separated from your operating funds, and how would that be demonstrated?
3. How is my balance attributed to me in your records?
4. What happens on insolvency — what is the intended path for end-user funds?
5. Does any of that apply to digital-asset balances? Usually not; get it stated.
6. What is your registration status, and with whom — Bank of Canada, FINTRAC, or both?

A provider that answers these crisply is demonstrating something a marketing page cannot. A provider that cannot describe its own arrangement is answering the question anyway.

How KwiikPay holds client funds

Fiat balances received from customers are held in dedicated accounts at regulated financial institutions, separate from KwiikPay’s own corporate funds, and are used only to execute customer instructions.

Digital-asset balances are not held under that same framework. The custodial and network risks are set out in our Terms of Business, and that section is worth reading before you hold a material balance rather than after.

KwiikPay is a trading name of KWP Finance Limited, registered with the Bank of Canada as a payment service provider under the RPAA and with FINTRAC as a money services business including dealing in virtual currency. Both are registrations. Neither makes KwiikPay a bank, and neither brings deposit insurance.

If you want to establish whether we can serve your business before going further, the eligibility check takes four questions, or talk to us.