New regulations proposed to enhance payment services in Singapore
Update on latest developments to the regulatory framework to enhance payment services in Singapore.
MAS is putting forward two parallel regulatory frameworks for better regulation of the payment services landscape. The Bill will empower MAS to better facilitate the current industry risks and concerns. This illustrates Singapore’s adaptation toward growth and development in the payments industry.
Some of the key provisions of the bill are detailed as below:
- Proposed licensing framework for payment service providers will only need one license to conduct any or multiple payment activities.
- There will be three classes of licenses depending on the level of transactions being operated and type of payment activity being engaged in.
- Payment activities have been widened to cover a broader range and has been categorised into seven groups of services: Account issuance service, domestic money transfer service, cross border money transfer service, merchant acquisition services, e-money issuance service, digital payment token service and money-changing service
- There will not be a uniform set of rules, instead the bill seeks to tailor risk-mitigating factors to each specific service to safeguard and provide better protection to customers and merchants alike.
- The Bill will empower MAS to ensure robust controls against:Money-Laundering and terrorist financing
- Loss of funds owed to consumers or merchants pertaining to insolvency
- Fragmentation and limitations to interoperability
- Technology and cyber standards in the payments space
- Licensees within the payment’s landscape will need to comply with ML/TF risk mitigation measures that will fall under the MAS act.
- There will be a 12-month grace period for all payment services with the exception of digital token payment services to give new entities more time to adjust to the new framework. This is an extension from the earlier proposed 6-month period to facilitate a smooth transition and comply with new requirements.
We will continue to update on these new measures as more information becomes available.