July 20, 2026

Establishing MSBs in Canada: from the 2000s to today

With the development of fintech and digital payments, the role of MSBs expanded rapidly, and the model gradually evolved into a core regulatory framework for Canada’s non-bank financial sector.

Money Services Businesses (MSBs) in Canada emerged in the 2000s as part of the AML framework following the creation of FINTRAC. The main idea was simple and practical - to separate non-bank financial services from traditional banking institutions and introduce oversight over financial flows in order to combat money laundering and terrorist financing.

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Initially, the MSB regime covered traditional financial activities such as:

International money remittance;

Foreign exchange (FX);

Money transfer services;

Cheque cashing services.

Timeline of MSB development in Canada:

2000s.
Introduction of MSBs as part of AML regulation through FINTRAC. The focus was on monitoring non-bank financial transactions and ensuring transparency of fund flows.

2010s.
Rapid growth of fintech, online payments, and remittance services. MSBs increasingly became a regulatory model for digital financial services.

From the 2020s
The MSB sector significantly expanded as virtual currency (crypto) businesses were included, AML/KYC requirements were strengthened, and oversight of foreign MSBs was enhanced.

From 2024.
A new regulatory layer was introduced - the Retail Payment Activities Act (RPAA), supervised by the Bank of Canada.

From 2025.
Companies engaged in retail payment activities (wallets, payments, transfers) are required to have not only MSB registration with FINTRAC but also PSP registration with the Bank of Canada.
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Overall, the regulator has been continuously introducing additional layers of oversight, reflecting the ongoing evolution of the MSB regime in Canada.

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