There’s No Such Thing as an MSB License in Canada. It's Only a Registration
Think you're licensed just because you're registered with FINTRAC or the Bank of Canada? Think again. Here’s why registration is easy and why staying compliant isn’t.
Why Everyone Calls It a License (But It Isn’t)
It sounds more official, but it’s technically wrong
Canada doesn’t issue a license to operate a Money Services Business (MSB) or a Payment Service Provider (PSP). What FINTRAC and the Bank of Canada provide are registrations, not licenses.
MSBs are regulated by FINTRAC, while PSPs fall under both FINTRAC and the Bank of Canada’s Retail Payment Activities Act (RPAA). Both require registration, not formal licensing.
FINTRAC MSB registration is not a license
FINTRAC operates a public registry. Once you file your documentation and provide a baseline compliance program, you are registered, not approved. There is no pre-approval inspection or formal vetting process.
Bank of Canada RPAA registration isn’t a license either
If you're an entity providing retail payment services, you may need to register under the RPAA. This too is a registration, not a license, and comes with reporting and audit obligations, but no formal license issuance.
Related: MSB Registration
Related: RPAA Registration
What Registration Really Means (And Doesn’t Mean)
You are on a list, but not necessarily certified
Being registered means you’re now visible to regulators, banks, and partners, but it doesn’t imply full approval of your business model or compliance program.
Registration is easy. Scrutiny comes later
Most MSB and RPAA registrations are processed with minimal review. But that changes the moment you start operating. At that point, you’re expected to meet all compliance requirements, and that’s where most firms struggle.
Once registered, RPAA entities must submit annual compliance attestations and self-assessments, and may be subject to supervisory reviews by the Bank of Canada.
Registration doesn’t guarantee a bank account
MSBs often struggle to get banked, even after FINTRAC registration. Financial institutions conduct their own due diligence, and weak compliance setups may result in rejection or de-risking.
Why Maintaining Compliance Is the Real Challenge
A registration doesn’t protect you from audits
FINTRAC or the Bank of Canada can review your operations at any time. If your compliance program is weak or your CAMLO is unqualified, you'll face enforcement.
Non-compliant MSBs risk administrative monetary penalties, being named publicly, and losing banking relationships—regardless of their registration status.
Related: Effectiveness Review
Core compliance requirements include:
-
A documented risk-based AML/ATF program
-
A qualified, competent CAMLO or compliance officer
-
Ongoing suspicious transaction reporting (STRs, LVCTRs, etc.)
-
Record-keeping and staff training
Related: CAMLO/MLRO Services
Related: EDD Services
Reporting is continuous, not just one-time
Both FINTRAC and the Bank of Canada require you to report ongoing activities, not just file once. RPAA registrants, for example, must maintain annual reports, risk self-assessments, and compliance attestations.
Why the Term “License” Can Be Misleading
It's a common industry shorthand, but not technically accurate
Many professionals casually use "license" when referring to MSB or RPAA registration. While widespread, this terminology can unintentionally confuse stakeholders, especially when dealing with regulators, banking partners, or legal teams.
It can create unrealistic expectations
Saying "we’re licensed" may give founders or investors a false sense of security. But the real test of readiness comes after registration, when compliance obligations kick in.
Final Thoughts: Don’t Confuse Access with Approval
Getting registered with FINTRAC or the Bank of Canada is only the beginning. What matters is whether your operations, team, and risk controls can withstand scrutiny.
AML Incubator helps firms not just register, but operate cleanly, legally, and with full audit readiness. From registration and CAMLO placement to risk assessments and remediation, we ensure you go beyond the minimum.
Start with a compliance readiness check or CAMLO consultation to ensure your registration leads to sustainable, bankable operations. Book a discovery call today.
