Nanopay Seeks to Incorporate Payments Bank

Summary#

On July 25, 2020, Nanopay Holdings Inc. said it plans to apply under the Bank Act for letters patent to create a new bank. The proposed bank would operate in Canada as Payments Bank™ / Banque Paiements and focus on payment processing and settlement rather than lending.

What it does#

• Nanopay Holdings Inc. intends to apply to incorporate a bank under the Bank Act.
• The new bank would trade as Payments Bank™ (English) and Banque Paiements (French). Its head office would be in Toronto, Ontario.
• Its main activities would be payment processing, clearing and settlement for customers such as fintechs, payment-technology providers and large billers (payroll, tuition, rent and insurance companies).
• It would offer domestic and cross-border payment services through application programming interfaces (APIs) and white‑label web interfaces.
• The proposed bank would not do lending or provide investment-advisory services.
• About 64% of Nanopay’s issued and outstanding shares are collectively owned by its board of directors: Laurence Cooke, Andrew Prozes, David Roffey, Gary Cohn, Matthew Grayson and Robert Crockford.
• Anyone who objects may write to the Office of the Superintendent of Financial Institutions at 255 Albert Street, Ottawa, Ontario K1A 0H2 on or before September 15, 2020.

Who's affected#

• Fintech companies and payment-technology firms that might use the bank’s APIs or white-label services.
• Large billers and organizations that move money for payroll, tuition, rent or insurance.
• Businesses and platforms that rely on payment clearing and settlement services.
• Consumers might be indirectly affected if businesses switch to new payment providers.
• It is unclear from the notice whether other parts of the financial sector (for example, small banks or credit unions) would notice any direct impact.

Why it matters#

• A bank focused only on payments could make it easier for fintechs and businesses to plug into banking services without traditional lending relationships.
• More options for payment processing can lower costs or speed up transfers for businesses and their customers.
• Because the bank would not offer loans or investment advice, its impact would be concentrated on payments infrastructure rather than broader consumer credit markets.
• This is an application notice, not an approval. The final decision depends on the normal review process and the discretion of the Minister of Finance. Publication does not guarantee letters patent will be issued.