Fraud Prevention Month, observed annually in March across Canada, serves as a critical reminder for individuals and businesses to heighten awareness about fraud risks and strengthen protective measures. Initiated over two decades ago, this national campaign, now in its 22nd year in 2026, aims to educate Canadians on recognizing, rejecting, and reporting fraud. Coordinated by organizations like the Competition Bureau Canada, the Canadian Anti-Fraud Centre (CAFC), and the Royal Canadian Mounted Police (RCMP), this year’s campaign underscores how scams are evolving with technology, including AI-driven schemes, investment frauds, and online deceptions.
For payment service providers (PSPs) like Apaylo, a licensed Canadian PSP regulated under FINTRAC and the Bank of Canada, this month is an opportunity to reinforce compliance and safeguard merchants and end-users, particularly in the crypto exchange sector.
As a PSP, Apaylo operates within a stringent regulatory framework designed to combat money laundering, terrorist financing, and fraud. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), administered by FINTRAC, imposes key responsibilities on money services businesses (MSBs), including PSPs. These include registering with FINTRAC at the outset of operations, implementing a comprehensive compliance program, verifying client identities, keeping detailed records, and reporting suspicious transactions. Apaylo, as an MSB, must ensure ongoing due diligence, such as monitoring for politically exposed persons (PEPs) and high-risk jurisdictions.
Failure to comply can result in severe penalties: administrative monetary penalties (AMPs) ranging from $1 to $500,000 per violation (with proposed increases to $40,000–$20 million under new legislation), or criminal charges leading to fines up to $2 million and imprisonment for up to five years. Recent FINTRAC enforcement actions, including a $9.2 million penalty against a real estate brokerage, highlight the regulator’s focus on sectors like MSBs and banks.
Ready to simplify payments for your business?
Discover how Apaylo can help you streamline transactions, reduce costs, and stay compliant with ease.
Complementing FINTRAC’s regime is the Retail Payment Activities Act (RPAA), overseen by the Bank of Canada, which mandates PSPs to register before performing retail payment activities. The RPAA defines PSPs as entities performing functions like holding end-user funds, initiating electronic funds transfers (EFTs), or providing clearing services—non-incidental to other business activities. Requirements include establishing risk management frameworks for operational risks, safeguarding end-user funds (via trust accounts or insurance), and annual reporting on compliance metrics. Non-compliance can lead to penalties, and as of 2026, registered PSPs must file detailed annual reports by March 31. Apaylo adheres to these standards to protect its merchants, many of whom are crypto exchanges serving end-users.
Staying compliant involves proactive measures: conducting risk assessments, training staff on AML/ATF protocols, and using advanced monitoring tools to detect anomalies. Penalties for non-compliance not only include fines but also reputational damage and potential loss of banking access. For instance, unregistered MSBs face up to $100,000 in AMPs per violation, emphasizing the need for timely registration and updates. In the crypto space, where Apaylo’s merchants operate, additional vigilance is required due to heightened fraud risks like investment scams and cyber threats.
In the coming articles, we’ll delve into specific threats: the Pig Butchering Scam targeting crypto OTC desks, the risks of accepting forwarded e-transfers that obfuscate fund sources, and best practices for servicing vulnerable populations in crypto transactions. Each topic highlights how non-compliance can lead to severe consequences, from law enforcement scrutiny to direct financial losses.
At Apaylo, compliance is core to our mission. We support merchants with robust tools and off board any found engaging in risky activities. By prioritizing education and adherence to FINTRAC and RPAA, we help build a safer payment ecosystem. Join us in recognizing this year’s Fraud Prevention Month by reviewing your compliance programs and staying informed—together, we can mitigate the hidden crimes of fraud.
