A major American private equity firm is set to acquire a leading payment processing company responsible for about one-third of all payment transactions in Canada. The Royal Bank of Canada and Bank of Montreal have announced the joint sale of Moneris, one of Canada’s top commerce solutions providers, to Francisco Partners for $2 billion. Following the deal’s revelation, both RBC and BMO experienced a positive response in their stock prices, with RBC expecting to gain around $475 million post-tax and BMO $600 million from the sale.
There are concerns among industry analysts regarding the potential negative impact on Canada’s digital sovereignty amid the ongoing trade tensions with the U.S. Digital sovereignty broadly refers to a country’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 free from external influence.
In the same month, a group of experts and academics penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty. Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these concerns, emphasizing that the deal could expose Canadians’ data to foreign governments and law enforcement agencies.
Moneris serves thousands of businesses in Canada, processing over five billion transactions annually. Polsky warned that Canadians’ data could potentially be accessed by foreign entities, posing privacy risks. With the ongoing trade war between Canada and the U.S., Polsky and Independent Canadian Senator Colin Deacon expressed apprehensions about how transaction data could be exploited for trade negotiations and surveillance purposes.
Both BMO and RBC refrained from additional comments on the deal, emphasizing that Moneris’s commitment to Canadian businesses would remain unchanged under new ownership. Polsky highlighted the inadequacy of Canada’s privacy legislation, underscoring the urgent need for stronger protections.
The Canadian government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, to enhance privacy regulations and address digital sovereignty concerns. The bill includes provisions for privacy impact assessments and sets stricter rules for data transfer outside Canada. However, Polsky criticized these efforts as insufficient in safeguarding data sovereignty.
The sale of Moneris is pending regulatory approvals and is expected to close by the end of the banks’ fiscal first quarter in 2027. Despite these developments, experts like Polsky believe that Canada still lags behind in adequately protecting its digital sovereignty and privacy rights.