A major American private equity firm is set to acquire a leading payment processing company in Canada, responsible for processing about one-third of the country’s payment transactions. The Royal Bank of Canada and Bank of Montreal have announced the sale of Moneris, a prominent commerce solutions provider, to Francisco Partners for a total of $2 billion. Following the announcement, both RBC and BMO experienced a positive surge in their stock prices. RBC anticipates gaining approximately $475 million post-tax from the transaction, while BMO expects to receive around $600 million.
However, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty, particularly amidst the ongoing trade tensions with the United States. Digital sovereignty pertains to a nation’s ability to maintain control over its digital assets. In September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy that is free from external influence.
Several experts and academics penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty and shield the country from external pressures, especially in light of the Moneris deal. Sharon Polsky, President of the Privacy and Access Council of Canada, expressed concerns about the implications of the acquisition, highlighting potential risks associated with foreign governments and law enforcement agencies accessing Canadians’ data.
Moneris services thousands of businesses in Canada, processing over five billion transactions annually. Polsky warned that the deal could expose Canadians’ data to foreign entities, raising scenarios such as U.S. border agents scrutinizing individuals’ transaction histories. The acquisition takes on added significance amid the trade war between Canada and the U.S., with fears that transaction data could be exploited as leverage during negotiations.
Both Polsky and Independent Canadian Senator Colin Deacon voiced apprehensions about the U.S. government’s potential access to Canadians’ data through the Moneris acquisition. BMO and RBC refrained from providing further comments beyond their official press releases on the transaction.
Concerns over Canada’s digital privacy legislation were also highlighted, with Polsky emphasizing the need for stronger regulations to protect citizens’ data. The Canadian government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, aimed at enhancing the country’s privacy framework and establishing privacy as a fundamental right. However, critics argue that existing legislation does not adequately address data retention and national security concerns. The Moneris sale is still subject to regulatory approvals and is expected to conclude by the end of 2027.
Overall, the Moneris deal underscores the challenges Canada faces in maintaining its digital sovereignty and privacy standards, signaling the need for further regulatory enhancements to safeguard citizens’ data and economic interests.