Consumer protection essential for online payments: the banking community | So Good News
More consumer protections are needed as new entrants into the fast-growing payments space take over, the head of the Canadian Bankers Association said.
Speaking at the Canadian Club Toronto event on Thursday, the president of the organization, Anthony Ostler, said that there are now more than 2,000 people who do not pay for the bank accounts that are expected to take action as a pressure on the bank.
The payment environment has grown with many technology companies such as Shopify, Square and PayPal offering options, while recently there has been a significant growth in services such as buy now, pay later.
Ostler said that while competition is good, the payment market is moving ahead of regulatory trends and consumers are not adequately protected.
“Let’s be clear, we don’t want the next FTX or Celsius coming out of Canada paying money.”
He said the government should add consumer protection to the Retail Payments Oversight Framework while considering the next steps.
Ostler also said that the government should do more to improve productivity, and complained about rising taxes that are targeting banks.
The tax includes a one-time tax of 15 percent on large banks and life insurance profits made during the pandemic, as well as a permanent increase in the tax on the two from 15 percent to 16.5 percent.
The tax will not only raise the cost of bank deposits, but companies across the country as they add another variable to investors in the country. A tech company might choose to look elsewhere, he said for example, where they “won’t be attacked randomly.”
“So we increase the cost of capital across all Canadian institutions by creating uncertainty about who will be next.”
In September, the parliamentary budget manager said that these two taxes could generate $5.3 billion over the next five years.
This report by The Canadian Press was first published Nov. 24, 2022.