Good morning.
Thank you, Mr. Chair, and committee members.
My name is Kevin Pearce. I am the chief compliance officer for PayPal Canada. In my role, I'm responsible for the implementation and oversight of our various compliance programs, designed to meet our risk and regulatory obligations in Canada.
I thank you for the opportunity to appear here today.
PayPal has remained at the forefront of the digital payment revolution for more than 20 years, growing into a two-sided network that connects consumers and merchants in more than 200 markets around the world. PayPal operates an open, secure and technology-agnostic payments platform that businesses use to transact with their customers online, in stores and on mobile devices. Through a combination of technological innovation and strategic partnerships, PayPal creates better ways for our 426 million active account holders around the globe to manage and move money, and offers choice and flexibility when sending payments or getting paid.
As a trusted and responsible payment service provider, we have developed stringent internal controls, policies and procedures for the purpose of complying with laws in Canada and other jurisdictions in which we operate. PayPal Canada is a registered money services business, both federally with FINTRAC and provincially, within Quebec, with Revenu Québec. As a registered reporting entity under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, we are required to monitor transactions on our platform and to submit suspicious transaction reports to FINTRAC. In addition, we're also required to submit international electronic funds transfer reports to FINTRAC for EFTs sent or received internationally. These are all obligations that we had prior to the declaration of the public order under the Emergencies Act and that we continue to have, even after its revocation.
PayPal Canada is also subject to numerous laws of general application at both the federal and provincial levels. Further, we anticipate having to register with the Bank of Canada as a payment service provider under the newly enacted Retail Payment Activities Act.
PayPal's global compliance organization is comprised of centres of excellence located around the world, which fulfill multiple enterprise risk management functions, including our “know your customer” responsibilities, suspicious transaction monitoring, regulatory filings and privacy. These centres of excellence are managed by and staffed with compliance professionals who have expertise in their respective fields and are exposed to the regulatory regimes across the markets in which we operate.
As it relates to the committee's interest in how crowdfunding was used in the recent protests in Canada, I would like to clarify that PayPal does not process payments for GiveSendGo and we did not process payments for the GoFundMe campaign set up to support this protest.
Nevertheless, we work hard to combat the use of our platform and services to promote hate, violence and other forms of intolerance. We carefully review account activity to ensure our services are used in accordance with the strict guidelines established in our terms and conditions, including our acceptable use policy.
PayPal has a long-standing, well-defined and robust acceptable use policy, which states that “You may not use the PayPal service to violate any law, statute, ordinance or regulation” or “for activities that relate to transactions involving the promotion of hate, violence, racial or other forms of intolerance that is discriminatory”.
Over many years, we have developed sophisticated systems and a global governance, risk management and compliance framework to help detect and prevent illegal activity and payment flows on our platform. When we become aware of an individual, a website or an organization using our services in a way that violates our policies or applicable laws, we take action. Our highly trained team of experts addresses each case individually and carefully evaluates the user's website, the associated organizations and their adherence to our terms and conditions. When a customer violates our terms, we may limit access to funds or part ways with the offending customer altogether, as may be appropriate.
PayPal engages with law enforcement proactively and reactively to help deter and prevent potential illegal activities on our platform, and aids in identifying bad actors who have used our platform for illegal purposes. Our ability to identify suspicious payments quickly is a key distinction from cash-based payment systems.
We at PayPal take our responsibilities to our customers and our regulators very seriously, and we're committed to working with governments, law enforcement, intelligence agencies and the financial industry to ensure financial platforms like ours are not used or exploited to promote or fund hate and extremist activities.
Mr. Chair, that concludes my remarks. I welcome questions.
Thank you for the time today.