Cheque cashers are now money services businesses: What you need to know

Effective April 1, 2025, cheque cashers are now considered Money Services Businesses (MSBs) under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). This marks a major shift in regulatory expectations and responsibilities for businesses in this sector.

Who is a cheque casher?

A cheque casher is a business that accepts and cashes cheques for a fee, without requiring the party presenting the cheque to have an account with them.

Here are some key characteristics of cheque-chasing businesses:

• They provide clients with immediate access to funds from cheques, often charging a service fee or a percentage of the cheque’s value
• They usually serve clients who may not have access to traditional banking services of who prefer quicker access to funds
• They may also offer related services like money transfers, bill payments, or payday loans

Regulatory obligations

Per the Canadian anti-money laundering (AML) supervisor, Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), persons or entities engaged in the business of cheque cashing services must fulfill all requirements set under the PCMLTFA and associated regulations.

This means cheque cashing activities – when done as a business – now fall under the definition of an MSB and are subject to Canada’s anti-money laundering laws and regulations.

If you operate a cheque-cashing service, here’s what you need to know – and do – to ensure compliance, continue accessing banking services, and manage your risk effectively.

1. Build an AML compliance program

Cheque cashers are now reporting entities under the PCMLTFA and are required to implement a formal AML compliance program. This is not just a regulatory formality, it’s a comprehensive framework that will form the basis of your ongoing relationship with your clients, your financial institution, and FINTRAC.

Your compliance program must include:

• Registration with FINTRAC as an MSB
• A governance structure, including a compliance officer who is responsible for implementing the AML program and liaising with FINTRAC
• A documented compliance regime with policies and procedures tailored to your specific business model
• A risk-based approach that identifies and assesses the risks of money laundering, sanctions evasion, and terrorist financing associated with your clients, services, delivery channels, geographic location, use of technology, and other factors
• Know-your-client (KYC) procedures, including client identification, record keeping, and ongoing monitoring
• Ongoing training for staff to ensure they understand their AML obligations and how to detect suspicious activity
• A review every two years to assess the effectiveness of the AML program

Without an AML program in place, cheque cashing businesses will be out of compliance and may be subject to administrative monetary penalties or enforcement actions.

2. Maintain or secure a bank account

With your new classification as an MSB, your financial services partners may now consider you as a high-risk business.

This means:

• If you already have a bank account, your bank may review your relationship, ask for new information, or apply enhanced due diligence measures to your account
• If you do not have a bank account, you may find it challenging to open one unless you demonstrate that you are compliant with AML obligations, including a FINTRAC registration and a fully developed AML program.

Financial institutions are required by law to assess the risk of doing business with all clients, including potentially high-risk businesses such as MSBs. Therefore, financial institutions might take a more pragmatic stance and not onboard cheque cashers without reviewing their AML program first. The absence of a robust program can be a deal-breaker, regardless of your operational history or customer base.

3. Use your AML program to access banking services

To successfully open or maintain a business account as an MSB, your AML program should be:

• Well documented and specific to your operations: Avoid using templates that are too generic or do not reflect your actual services and business model
• Auditable: Be prepared to provide policies, client risk assessments, sample records, and training materials to your bank or external auditors upon request
• Demonstrably implemented: Financial services partners will want to see that your compliance program is part of your day-to-day operations.

Financial institutions want assurance that you are not exposing them to undue money laundering and terrorist financing risks. A credible AML program will position you as a trustworthy and compliant partner, which can be the deciding factor in being granted or maintaining access to financial services.

How MNP can help

At MNP, we specialize in helping cheque cashers and other MSBs build practical, effective AML compliance programs that meet regulatory expectations and support your business operations.

Our services include:

• Designing full AML compliance programs tailored to your operations
• Conducting risk assessments and drafting policy and procedure documents
• Providing staff training and compliance officer coaching
• Advising on how to engage effectively with banks and credit unions to secure or retain financial services
• Supporting your ongoing compliance with FINTRAC through reporting guidance and program reviews

Don’t wait to act. The new MSB classification means you’re already subject to compliance requirements. Reach out to MNP’s AML team today to ensure your business is prepared and positioned for success in this new regulatory environment.