About Us
FAQ
Global Advisory Experts Logo
Global Advisory Experts Logo

Find a Global Law Expert

Specialism
Country
Practice Area

Awards

Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

New payment service legislation in Singapore: what to expect?

posted 5 years ago

Today, Singapore is among the
top 5 most popular financial systems in the world. In order to strengthen its
status as a leading global financial center and create an innovative
environment for financial technology, Singapore authorities decided to update the
legislative framework on payments and payment services. On January 14, 2019,
the Payment Services Act (PSA) was adopted in order to combine the regulation
of services that were previously regulated separately and to ensure licensing
and monitoring of payment systems in a single legislative act. The new act has
not yet entered into force, but the Singapore financial regulator claims that
it will enter into force by the end of 2019, along with additional legislation
that will provide the basic forms, processes and procedures for applying for a
license. In the meantime, financial institutions should become familiar with
all the requirements and obligations in accordance with the PSA and implement
the required preparation.

What payment services fall
within the scope of the PSA?

PSA significantly expands the
scope of regulated payment services and divides them into seven categories:

  • Issue of electronic
    money;
  • Opening accounts;
  • International transfers
    of funds;
  • Domestic money transfers;
  • Sale and purchase services;
  • Services in the field of
    virtual currencies;
  • Exchange services.

Types of payment licenses in
Singapore under the PSA:

 

1. Money-Changing
license

 

This license only gives the right to exchange money. These include exchangers
that profit from the exchange of banknotes in physical currency.

 

If you want to carry out any combination of payment services from the above
seven categories, you need to apply for a Standard payment institution license
or Major payment institution license.

 

2. Standard
payment institution license

 

Requirements:

The average value of the total cost of all payment transactions that have
been accepted, processed or performed by the licensee for one month during the
calendar year should not exceed:

• 3 million Singapore dollars (~ $ 2,171,126.49) for one payment service;

• 6 million Singapore dollars (~ $ 4342252.98 $) for two or more payment
services,

 

3. Major payment
institution license

If the average total cost of all payment transactions for one month exceeds
the thresholds indicated below, then you need a Major payment institution
license

 

• 3 million Singapore dollars (~ $ 2,171,126.49) for one payment service;

• 6 million Singapore dollars (~ $ 4,342,252.98) for two or more payment
services

 

What the SVF licensees can do?

If you are an SVF license
holder, a license holder under the PS(O)A (Payment Systems (Oversight) Act) or
MCRBA (Money-Changing and Remittance Businesses Act), you do not have to
re-apply for PSA licenses.

You will have 6 months from
the date of the new PSA entering into force, to notify Singapore’s financial
regulator of the specific payment services that you provide in writing form. In
this case, your existing license will continue to be valid.

If you have a license under
the MCRBA, it will be equated with a Money-changing license. All other licenses
are equivalent to Major payment institution license.

In case where you do not yet
need a license in accordance with applicable legislation (for example, PS(O)A
or MCRBA), but you need a license in accordance with PSA, you will have a
6-month period from the date the PSA enters into force to apply for obtaining a
license. During this period, you can continue to provide payment services.

 

Thus,
Singapore law is in transition. According to the PSA, which was adopted, but
has not yet entered into force, financial institutions providing payment
services are not required to obtain a license individually for each of the
payment services they offer, instead you need to obtain a license in one of
three classes of licenses.

If you decide
to start a FinTech business in Singapore, SBSB lawyers will be happy to help
you to decide on the type of financial license, as well as prepare all the
necessary documents and forms for applying to the financial regulator.

For more
detailed information regarding the requirements for licensees and cost
clarifications, please write to our specialists. We will be happy to answer to all
of your questions!

Author

posted 6 days ago

Join

who are already getting the benefits
0

Sign up for the latest advisory briefings and news within Global Advisory Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.

Naturally you can unsubscribe at any time.

Newsletter Sign Up

About Us

Global Advisory Experts is dedicated to providing exceptional advisory services to clients around the world. With a vast network of highly skilled and experienced advisers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

Contact Us

Stay Informed

Join Mailing List

GAE