The head of the Canadian Bankers Association said there is a need for more consumer protection as newcomers in the rapidly growing payments field are outpacing regulation.

Speaking at the Canadian Toronto Club event on Thursday, the association president Anthony Osler said there are now more than 2,000 non-bank payment service providers with more expected amid initiatives such as the push for open banking.

The payments space has also grown with many tech companies like Shopify, Square, and PayPal offering options, while there has recently been massive growth in services like Buy Now, Pay Later.

Osler said that while competition is good, the payments market is operating ahead of the regulatory environment and consumers do not have adequate protection, adding: "Let's be clear, we do not want the next FTX or Celsius coming from the Canadian payments system." He said the federal government must add consumer protection to the retail payments oversight framework as it studies next steps.

Osler also stated that the government needs to make more effort to boost productivity, raising concerns about federal taxes specifically targeting the banking sector.

The taxes include a 15 percent non-recurring gains tax on profits of major banks and life insurance companies realized during the pandemic, along with a permanent increase in the tax rate for the two from 15 percent to 16.5 percent.

The taxes will not only raise the cost of capital for the banking sector but will also increase the cost of capital for companies across the country as they add another variable for potential investors in the country. For example, a tech company might choose to research elsewhere where they will not be "randomly targeted."

Also, in September, the parliamentary budget officer estimated that the two taxes could generate 5.3 billion dollars over the next five years.