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An American Company Could Soon Be Handling Your Financial Data

Moneris manages one in three Canadian payments. US private equity is buying it

When the Royal Bank of Canada and the Bank of Montreal announced this summer that they were selling their jointly owned digital-payments-processing company for approximately $2 billion, it was big news in the financial sector—for good reason.

The two institutions are selling Moneris, a company that handles one in three Canadian payments, to an American private equity firm called Francisco Partners. RBC and BMO are the last of the big banks to sell their processor to an American owner. What does it mean for our data to be running through an American entity? Especially during a trade war? As one Reddit commenter pointed out, “What’s the point of elbows up if mostly everything gets sold to the US eventually?”

Douglas Sarro is an assistant professor at the faculty of law at the University of Ottawa. His research focuses on corporate law, securities regulation, as well as the relationship between innovation, politics, and law. The Walrus spoke with him about why the banks may have decided to let go of Moneris, what the sale means for Canadians in the current climate, and whether it can be stopped.

This interview has been edited and condensed for clarity.

What does a payment processing company do?

It means they operate the machines that we tack our debit or credit cards on when we pay for something at a grocery store or a gas station. More broadly, they run the rails that connect merchants, banks, and credit card companies.

So, we want to make a purchase. The payment processor sends our information from the merchant to our financial institution, which validates it, and then the payment processor goes back to the merchant and says, “Yeah, you’re clear to give this consumer the goods; they’re okay to pay for it.”

Why is Moneris’s sale to an American firm such a big deal?

Moneris is our major Canadian-owned payment processor. Firms like them play an important role in our financial system. They also handle a lot of our personal information, and there have been concerns about losing control of this infrastructure, especially to a country we’re now in a trade war with, and I think that timing can’t be overlooked.

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