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 sale of Moneris, a prominent commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the announcement of the deal, both RBC and BMO experienced a boost in their stock prices. RBC anticipates a post-tax gain of around $475 million, while BMO expects $600 million.
Industry analysts have expressed concerns about the potential negative impacts on Canada’s digital sovereignty amid the ongoing trade tensions with the U.S. Digital sovereignty pertains to a country or individual’s ability to maintain control over their digital assets. In September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy free from external influence.
A group of experts and academics urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty and shield it from potential external pressures. Sharon Polsky, President of the Privacy and Access Council of Canada, echoed these sentiments, highlighting the risks of Canadian data being accessible to foreign governments and law enforcement agencies through the Moneris deal.
With Moneris servicing over 325,000 points of commerce and processing more than five billion transactions annually, the deal raises concerns about the potential misuse of transaction data for leverage in trade negotiations between the U.S. and Canada. The lack of robust privacy legislation in Canada further compounds these worries, as Polsky emphasized the importance of strengthening privacy laws to protect Canadians’ data from foreign interference.
The sale of Moneris is subject to regulatory approvals, including clearance under the Competition Act, and is expected to be finalized by the end of the banks’ fiscal first quarter in 2027. Despite efforts to update privacy regulations through Bill C-36, Canada still faces challenges in safeguarding its digital sovereignty and ensuring robust data protection measures.