A major American private equity firm is set to acquire a leading Canadian payment processing company responsible for processing about one-third of all transactions in the country. The Royal Bank of Canada and Bank of Montreal jointly announced the sale of Moneris, a prominent commerce solutions provider in Canada, to Francisco Partners for a substantial $2 billion.
Following the announcement of the deal, both RBC and BMO experienced a positive market response, with their shares surging. RBC anticipates a post-tax gain of approximately $475 million from the transaction, while BMO expects to gain around $600 million.
Despite the initial optimism surrounding the deal, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty, especially amidst the ongoing trade tensions with the United States.
Digital sovereignty broadly refers to a country’s 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 that is independent from external influences.
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 from external pressures. Sharon Polsky, President of the Privacy and Access Council of Canada, echoed these sentiments, expressing concerns about the implications of the Moneris deal on Canadians’ data security and privacy.
Moneris, which caters to thousands of businesses in Canada, processes over $5 billion in transactions annually through more than 325,000 points of commerce. Polsky highlighted the risks of Canadian data being accessible to foreign entities, including foreign governments and law enforcement agencies.
The acquisition of Moneris by an American firm raises additional concerns, particularly amid the ongoing trade disputes between Canada and the U.S. Polsky and Independent Canadian Senator Colin Deacon both warned about the potential exploitation of Canadians’ transaction data for trade negotiations or by the U.S. government.
Both BMO and RBC, the current owners of Moneris, declined to provide further comments on the deal beyond their press releases. Meanwhile, discussions on enhancing privacy legislation in Canada are ongoing, with the introduction of Bill C-36, aimed at protecting consumer data and privacy rights.
Despite these legislative efforts, concerns persist about the adequacy of Canada’s privacy laws and the protection of digital sovereignty. The sale of Moneris is subject to regulatory approvals and is expected to be finalized by the end of the banks’ fiscal first quarter in 2027, leaving Canada facing challenges in safeguarding its digital interests.