Prepaid payment products and prepaid payment product accounts

May 2021

This guidance comes into effect on June 1, 2021.

This guidance is applicable to financial entities (FEs). It is also applicable to life insurance companies and entities that are life insurance brokers and agents that offer prepaid payment products (PPPs) to the public, or maintain prepaid payment product accounts (PPP accounts); they are considered to be FEs for the purpose of providing those activities.Footnote 1 The guidance explains the requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations related to PPPs and PPP accounts.  

This document answers the following questions:

  1. What are PPPs and PPP accounts?
  2. What are my requirements and what are the exceptions for PPPs and PPP accounts?

1. What are PPPs and PPP accounts?

PPP

A PPP is a product that is issued by an FE that enables a person or entity to engage in a transaction by giving them electronic access to funds or to virtual currency paid into a PPP account held with the FE in advance of a transaction taking place.

It excludes a product that:

The definition of a PPP is applicable to reloadable and non-reloadable products that can be accepted in a variety of locations, for example, by being connected to a widely accepted payment network.

PPP Accounts

PPP accounts are accounts that are connected to a PPP and that permit:

It excludes an account to which only:

2. What are my requirements and what are the exceptions for PPPs and PPP accounts?

PPP accounts are subject to account-opening obligations, just like other types of accounts. As well, transactions carried out with PPPs connected to PPP accounts are subject to transaction obligations.

In instances where a business opens a PPP account with a financial entity, it is the financial entity that would have all of the obligations associated with that PPP account.

For example, if a business opens a PPP account with a financial entity, deposits $5,000 in that account, and then instructs the financial entity to issue 50 PPPs, each in the amount of $100, that are connected to the PPP account, it is the financial entity and not the business that is subject to the PPP requirements.

The requirements and exceptions applicable to PPP accounts and related transactions are described in the following guidance:

Date Modified: