In a major milestone for Canada’s fintech landscape, the fintech firm KOHO has officially been recognised as a Payment Service Provider under the federal framework. The company’s new status reflects its commitment to regulated, secure operations and positions it for robust growth in the digital payments space.
In a defining moment for Canada’s rapidly maturing fintech landscape, KOHO, one of the country’s leading financial technology firms, has officially been recognized as a Payment Service Provider (PSP) under the Bank of Canada’s regulatory framework. This achievement signifies more than just compliance; it represents a major step toward greater accountability, consumer trust, and sustainable innovation in the digital payments industry.
For KOHO, this milestone cements its status as one of the first fintechs to operate fully under the Retail Payment Activities Act (RPAA) — a regulatory initiative that ensures payment service providers adhere to strict standards of security, transparency, and financial resilience. For consumers, it means enhanced protection and confidence in one of Canada’s most trusted alternative banking platforms.
Understanding KOHO’s New Regulatory Status
To fully appreciate the significance of KOHO’s registration, it’s essential to understand what PSP designation entails. Under the Retail Payment Activities Act (RPAA), entities that facilitate electronic fund transfers, store payment credentials, or execute payment transactions fall under the oversight of the Bank of Canada (BoC).
This legislation was introduced to create a standardized regulatory framework for non-bank entities that play crucial roles in digital finance. Previously, fintechs like KOHO operated under looser oversight, often relying on partnerships with licensed institutions for backend compliance. However, as digital payments became a dominant part of Canada’s financial ecosystem, policymakers recognized the need to ensure consistent safeguards across all service providers.
Now, with its official PSP status, KOHO joins a select group of fintechs recognized for meeting the BoC’s strict requirements in key operational areas such as:
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Risk management and fraud prevention
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Safeguarding customer funds
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Operational resilience and continuity planning
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Data protection and transparency in service delivery
This registration marks KOHO’s transition from a fast-scaling fintech to a fully regulated financial entity, capable of offering secure and compliant payment solutions to millions of Canadians.
A Milestone in KOHO’s Growth Journey
Founded in 2014, KOHO set out to democratize access to modern financial tools and provide Canadians with a fairer, fee-free alternative to traditional banking. Over the years, the Toronto-based firm has become a household name in digital finance, offering spending accounts, savings tools, early payroll access, and cash-back features through its mobile-first platform.
The company’s user-friendly app — combining the functionality of a debit card with the intelligence of a budgeting tool — has helped redefine how Canadians manage their money. KOHO’s focus on transparency and user empowerment has attracted a broad customer base that values simplicity, speed, and fairness in financial management.
However, regulatory recognition has always been the missing piece in its long-term vision. With PSP registration now secured, KOHO stands on stronger ground to expand its offerings, innovate responsibly, and explore new service lines, such as:
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Advanced digital payment features
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Enhanced security for consumer funds
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Broader integrations with partner institutions and payment networks
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Potential entry into cross-border and merchant-payment solutions
In short, KOHO’s next chapter is not just about growth — it’s about trust-based expansion that aligns innovation with consumer protection and national regulatory priorities.
Why the PSP Designation Matters
Becoming a registered PSP under the Bank of Canada carries far-reaching implications — both for KOHO and for the broader fintech industry.
For KOHO, it’s a public affirmation that the company’s internal controls, governance practices, and risk management systems meet national regulatory standards. It reinforces the brand’s credibility in a competitive space where consumer confidence is a decisive factor.
For consumers, it provides assurance that their funds are handled with the same rigor and protection as those held by traditional financial institutions. The oversight of the Bank of Canada ensures that KOHO maintains adequate liquidity, security, and contingency measures to safeguard customer assets in any circumstance.
From an industry perspective, this milestone signals a broader shift in Canada’s financial ecosystem. It illustrates the country’s commitment to balancing innovation with regulation, ensuring fintechs can compete and thrive responsibly. The RPAA framework effectively levels the playing field between banks and fintechs while maintaining a focus on consumer protection.
Bridging the Trust Gap in Canadian Fintech
One of the persistent challenges in fintech adoption has been the trust gap between digital-first financial services and traditional banking institutions. Many consumers, while intrigued by the convenience of fintech apps, have hesitated to migrate fully due to concerns around security, reliability, and regulatory protection.
KOHO’s PSP registration directly addresses this gap. By voluntarily stepping into a regulated environment — one designed for transparency and accountability — KOHO demonstrates that innovation and compliance can coexist harmoniously.
As Daniel Eberhard, KOHO’s Founder and CEO, has often emphasized, the company’s mission is to make financial progress accessible to everyone. The new PSP status allows KOHO to pursue that mission with even greater integrity, ensuring that its growth is sustainable, ethical, and backed by national-level oversight.
For the broader fintech community, KOHO’s example may set a precedent. As Canada’s payment landscape evolves, more fintechs are expected to pursue PSP registration — not just as a legal requirement, but as a competitive differentiator that enhances consumer trust.
Implications for the Canadian Market
Canada’s digital payments industry has seen explosive growth in recent years, accelerated by shifting consumer habits, e-commerce expansion, and mobile-first financial experiences. According to industry reports, more than 60% of Canadians now prefer digital payment methods over cash, while mobile banking usage has surged by over 40% since the pandemic.
In this evolving context, the Bank of Canada’s oversight of payment service providers is both timely and essential. It ensures that as innovation accelerates, consumer protection doesn’t lag behind.
KOHO’s registration contributes to this stability by setting a benchmark for responsible innovation. It demonstrates that fintechs can operate with agility and creativity while adhering to stringent regulatory expectations — a balance that’s increasingly important as new technologies like AI-driven financial tools and embedded payments enter the mainstream.
Enhancing Consumer Confidence and Transparency
For KOHO’s users, the benefits of this development are immediate and tangible. The PSP designation means that their deposits and transactions are safeguarded under a framework that prioritizes security, transparency, and accountability.
Specifically, the Bank of Canada’s oversight requires PSPs to:
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Segregate customer funds from company operational accounts.
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Maintain operational continuity plans to ensure service availability during disruptions.
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Report key compliance metrics regularly to regulatory authorities.
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Demonstrate risk and fraud mitigation measures in all transaction flows.
These requirements translate into a more resilient and secure user experience, where consumers can trust that their money is protected — whether they’re saving, spending, or transferring funds through KOHO’s platform.
A Catalyst for Innovation and Expansion
With its new regulatory credentials, KOHO is poised to scale its operations and introduce more advanced financial products. The company can now engage in partnerships and integrations that were previously limited by regulatory constraints, such as collaborations with financial institutions, government programs, or international payment networks.
Internally, the registration also empowers KOHO to enhance its governance, compliance infrastructure, and technology frameworks, paving the way for:
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Faster rollout of new features like instant transfers, credit tools, and smart budgeting.
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Improved data analytics and AI-driven insights to personalize customer experiences.
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Deeper market penetration across underbanked or digitally native segments of the population.
In the coming years, KOHO is likely to expand its product portfolio beyond everyday banking to include broader financial wellness solutions, reflecting a growing demand for tools that combine convenience with responsible financial management.
Broader Industry Significance
KOHO’s achievement underscores a critical inflection point for Canada’s fintech ecosystem. As regulatory frameworks mature, fintechs that once operated on the fringes of traditional finance are now becoming mainstream, credible financial service providers.
This transition brings several benefits to the economy:
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Enhanced consumer protection: Stronger oversight reduces fraud and improves service reliability.
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Increased competition: Traditional banks are encouraged to innovate faster and adopt more customer-centric models.
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Policy advancement: Regulators gain clearer insights into fintech operations, helping shape future legislation.
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Global alignment: Canada’s approach mirrors global best practices in fintech regulation, improving investor confidence and cross-border interoperability.
KOHO’s success in achieving PSP registration serves as a case study for how fintechs can mature within a well-defined regulatory ecosystem — one that fosters innovation without compromising accountability.
Conclusion: A Turning Point for KOHO and Canadian Fintech
From its inception, KOHO has positioned itself as a champion of financial inclusion and transparency. Now, with its official designation as a Payment Service Provider under the Bank of Canada, the company has solidified that reputation with regulatory legitimacy and public trust.
This recognition isn’t just about checking a compliance box — it’s about reshaping the future of fintech in Canada. KOHO’s journey illustrates how young, disruptive companies can evolve into responsible, trusted pillars of the financial system while maintaining their innovative edge.
As the fintech sector continues to grow, KOHO’s example offers a roadmap for others: embrace regulation not as a constraint, but as a catalyst for sustainable innovation. For consumers, it’s a win — greater security, transparency, and confidence in the digital financial tools that increasingly shape daily life.
In every sense, KOHO’s PSP registration marks a turning point for Canada’s digital economy — one that brings fintech and traditional finance closer together in pursuit of a more open, secure, and inclusive financial future.
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