Article Singapore: New Payment Services Act Takes Effect

(Apr. 17, 2020) On January 28, 2020, Singapore’s new Payment Services Act went into effect. The Act unifies and streamlines the regulatory requirements for various payment services provided in Singapore, including electronic payments and cryptocurrency dealing and exchange services. The Act was passed by Parliament on January 14, 2019.

The Act regulates seven types of licensable payment services: account issuance services, domestic money transfer services, cross‑border money transfer services, merchant acquisition services, e-money issuance services, digital payment token services, and money‑changing services. (First Schedule, Part 1.)

An “account issuance service” is one that issues a payment account to any person in Singapore, or any service relating to any operation required for operating a payment account, including “any service (other than a domestic money transfer service or a cross-border money transfer service) that enables money to be placed in … or withdrawn from a payment account.” (First Schedule, Part 3.)  A “payment account” can be any account, device, or facility in physical or electronic form.  Providing an e-wallet, for example, is an account issuance service. (§ 2(1).)

Under the Act, any entity that provides any type of payment service in Singapore needs a license entitling it to provide that type of payment service, unless otherwise exempted. (§ 5(1).) Such entities may apply to Singapore’s central bank and financial regulator, the Monetary Authority of Singapore (MAS), for the appropriate license. (§ 6(1).)

The Payment Services Act prescribes three types of licenses—a money‑changing license, a standard payment institution license, and a major payment institution license—and imposes different requirements according to the risks posed by the scope and scale of services provided by the licensee. (§ 6(2).) Singapore-licensed banks, merchant banks, finance companies, and credit card or charge card issuers are exempt from licensing, but are subject to conduct obligations under the Act. (§ 13.)

All payment service providers holding a license under the Payment Services Act must meet anti-money laundering and countering the financing of terrorism (AML/CFT) requirements imposed by the MAS on relevant licensees. The MAS has issued two sets of AML/CFT guidelines, respectively applicable to the digital payment token service and other payment services.

Singapore is one of the world’s most competitive financial centers, ranking fifth in the 27th edition of the Global Financial Centres Index (GFCI) released in March 2020. It is also a world-leading fintech center, ranking fifth on the FinTech Index in the GFCI 27 report. Aiming to make itself an “electronic payments society,” the city-state has developed innovative electronic payment systems. The Singapore Quick Response Code [SGQR], for example, is the world’s first unified QR code for electronic payments, which combines the QR codes of different electronic payments into one, according to the MAS.

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Singapore: New Payment Services Act Takes Effect
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Chicago citation style:

Singapore: New Payment Services Act Takes Effect. 2020. Web Page. https://www.loc.gov/item/global-legal-monitor/2020-04-17/singapore-new-payment-services-act-takes-effect/.

APA citation style:

(2020) Singapore: New Payment Services Act Takes Effect. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2020-04-17/singapore-new-payment-services-act-takes-effect/.

MLA citation style:

Singapore: New Payment Services Act Takes Effect. 2020. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2020-04-17/singapore-new-payment-services-act-takes-effect/>.

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