(Toronto) Greater consumer protection is needed in the payment services space as new players enter this growing industry outpace regulation, said the head of the Canadian Bankers Association (CBA). ).
Speaking at a Canadian Club Toronto event on Thursday, association president Anthony Ostler said there are now more than 2,000 non-bank payment service providers and that number is called to grow due to certain initiatives, in particular those in favor of an open banking system.
The payment services industry has grown with many technology companies such as Shopify, Square, and PayPal. More recently, the industry has seen tremendous growth in buy-now-pay-later services.
While competition is good, Ostler noted that the payments market is ahead of the regulatory environment and consumers are not sufficiently protected.
“Let’s be clear, we don’t want the next (a la) FTX or Celsius crash to come from Canada’s payments ecosystem. »
He said the federal government should add consumer protections to the retail payment oversight framework as it prepares next steps.
Ostler also said the government should do more to boost productivity and raised concerns about federal tax proposals that specifically target the banking sector.
These measures include a one-off 15% tax on the profits of large banks and life insurers made during the pandemic, as well as a permanent increase in the tax rate for both, from 15.0% to 16, 5%.
The new tax measures would not only increase the cost of capital for the banking sector, but also for businesses across the country, as they add another variable for potential investors in Canada. A tech company might choose to look elsewhere, Ostler said as an example, where it wouldn’t be “randomly attacked.”
“So we are increasing the cost of capital for all Canadian companies by creating uncertainty about who might be next. »
In September, the Parliamentary Budget Officer estimated that the two tax measures could generate $5.3 billion over the next five years.