A major American private equity firm is set to acquire a prominent payment processing company in Canada, responsible for approximately one-third of all payment transactions in the country. The Royal Bank of Canada and Bank of Montreal revealed their decision to sell Moneris, a leading commerce solutions provider, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO experienced a surge in their stock prices. RBC anticipates a post-tax gain of around $475 million from the sale, while BMO foresees a $600 million benefit.
Despite the positive financial outcomes for the banks, 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 U.S.
Digital sovereignty broadly refers to a country’s or individual’s ability to maintain control over their digital assets. In a recent statement, AI Minister Evan Solomon emphasized the necessity for Canada to establish a sovereign digital economy free from external influence. This sentiment was further echoed in an open letter signed by numerous experts urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty from potential external interference.
Sharon Polsky, President of the Privacy and Access Council of Canada, voiced apprehension about the implications of the Moneris deal on Canadians’ data privacy. With Moneris servicing over 325,000 points of commerce and processing more than five billion transactions annually, Polsky highlighted the risk of Canadians’ data being accessible to foreign governments and law enforcement agencies. She cited scenarios like U.S. border agents scrutinizing individuals’ transaction histories, potentially impacting their entry into the country.
The timing of the acquisition amid trade disputes between the two nations has raised further concerns about the potential leverage of transaction data in trade negotiations. Polsky expressed apprehension that the vast amount of data from Canadian purchases could be exploited for trade-related purposes, potentially undermining Canadians’ privacy and sovereignty.
Colin Deacon, an Independent Canadian senator, shared similar concerns about the implications of the deal on Canadians’ data privacy. He warned about the risk of data-sharing with the U.S. government, which could compromise individuals’ privacy rights.
Both BMO and RBC, in response to inquiries, referred to their press releases on the deal without elaborating further. Moneris assured that its commitment to Canadian businesses would remain unchanged under the new ownership.
While the Canadian government has introduced legislation like Bill C-36 to enhance digital privacy protections, Polsky emphasized that more stringent measures are needed to ensure data sovereignty. She noted that existing laws may not adequately protect Canadians’ data in scenarios where Canadian companies are compelled to comply with foreign regulations.
The sale of Moneris is pending regulatory approvals and is expected to be finalized by the end of the banks’ fiscal first quarter in 2027. Despite legislative efforts, concerns persist about Canada’s readiness to address digital sovereignty challenges and protect citizens’ data privacy in an increasingly interconnected global landscape.