Singapore: Payment Services Bill 2018

Last Updated: 5 December 2018
Article by Eric Chan and Johnny Lim

The Payment Services Bill ("Bill") was tabled for First Reading in Parliament on 19 November 2018. The Bill, once passed, represents a significant milestone in consolidating, streamlining and modernising existing payments legislation as part of Singapore's payments roadmap to 2020. Participants in the payment ecosystem should carefully consider the requirements of this new payments framework as the scope of regulated payment activities have been expanded, and certain participants may now require licensing under the new regime. Existing regulated or licensed entities should also be mindful of new compliance requirements intended to address concerns on money laundering, user protection, interoperability and technology risks.


The Bill is the outcome of extensive consultation, with the first consultation undertaken in August 2016 on the proposed payments framework, followed by a second consultation on the draft Bill in November 2017.

The Bill, once passed, represents a significant milestone in consolidating, streamlining and modernising existing payments legislation as part of Singapore's payments roadmap to 2020.

Payments services are currently regulated under two pieces of legislation, the Payment Systems (Oversight) Act ("PSOA") and the Money-changing and Remittance Businesses Act ("MCRBA").

The advent and rapid progression of financial technology or "FinTech" has transformed and revolutionised payment services like never before. New business models have emerged which have blurred the lines between activities regulated under these two Acts. At the same time, new payments activities have arisen, together with new risks and vulnerabilities. The Bill thus seeks to empower the Monetary Authority of Singapore ("MAS") to adopt a calibrated approach in regulating payment services, mainly for the following key risks and concerns:

  1. money-laundering and terrorism financing ("ML/TF");
  2. user protection (eg loss of funds owed to consumers or merchants due to insolvency);
  3. fragmentation and limitations to interoperability; and
  4. technology and cyber risks.

The Bill comprises two parallel frameworks as follows:

Designation framework for payment systems

The first is a designation regime for systemically important payment systems.

This regime will largely be imported and retained from the PSOA to allow MAS to designate payment systems for close supervision, when considered to be of significance at the systemic or system-wide level.

The regime is expanded in the Bill to empower MAS to designate and regulate payment systems for competition or efficiency reasons. Inter-bank payment systems such as FAST, GIRO, and MEPS+ are designated under the PSOA, and are likely to be designated as such under the new Bill.

Licensing framework for payment service providers

The second is a single modular activity-based licensing framework for providers of payment services regulated under the Bill.

The Bill will regulate seven payment services, namely:

Activity A: Account issuance service
  • Service of issuing a payment account or any service relating to any operation required for operating a payment account.
  • Such as an e-wallet (including certain multi-purpose stored value cards) or a non-bank issued credit card.
Currently: Account issuance services per se are not regulated (unless regulated as part of a regulated activity such as operating a remittance business or certain stored value facilities ("SVFs") with a float above S$30 million).

Regulation of SVFs under the PSOA will be re-worked and subsumed as account issuance services and e-money issuance services.
Activity B: Domestic money transfer service
  • Providing local funds transfer services in Singapore.
  • Includes payment gateway services and payment kiosk services.
Currently: Domestic remittance services per se are not regulated, but may be regulated to the extent that this forms part of money-changing and remittance businesses under the MCRBA.
Activity C: Cross-border money transfer service
  • Providing inbound and outbound remittance services in Singapore.
Currently: Regulated mainly as remittance businesses under the MCRBA. Regulation of remittances is currently more limited and confined to the business of accepting moneys for the purpose of transmitting moneys outside Singapore.
Activity D: Merchant acquisition service
  • Providing merchant acquisition service in Singapore where the service provider processes payment transactions from the merchant and processes payment receipts on behalf of the merchant.
  • Examples include providing point-of-sale terminals or operating online payment gateway.
Currently: Merchant acquisition services per se are not regulated (unless regulated as part of a regulated activity such as operating a remittance business).
Activity E: E-money issuance service
  • Issuing e-money in Singapore to allow the user to pay merchants or transfer to another individual.
Currently: Regulation comes in the form of regulating SVFs under the PSOA. The concept of "e-money" is, however, broader than SVFs as stored value in the SVF is limited to prepayment for goods and services.
Activity F: Digital payment token service
  • Buying or selling digital payment tokens (commonly known as cryptocurrencies), or providing a platform to allow persons to exchange digital payment tokens in Singapore.
Currently: Digital token services per se are not regulated (unless regulated as part of a regulated activity or if the tokens in question attract regulation under a separate regime, such as our securities laws, where the tokens are capable of being construed as securities).
Activity G: Money-changing service
  • Buying or selling foreign currency notes in Singapore (ie exchange of physical currency notes)
Currently: Regulated mainly as money-changing businesses under the MCRBA.

In line with the objective of having a calibrated approach in regulating risks associated with prescribed regulated payment services, a service provider will be required to apply for a single licence out of the following three classes, each class commensurate with the risks associated:

  1. money-changing licensee;
  2. standard payment institution ("SPI"); or
  3. major payment institution ("MPI").

A money-changing licensee will only be permitted to engage in money-changing services.

SPIs and MPIs will be allowed to engage in any combination of the payment services regulated under the Bill.

In general, while SPIs will be required to comply with less onerous requirements as compared to MPIs, they will be subject to certain limitations such as on transaction volume and e-money float. SPIs will be regulated for ML/TF risks, basic corporate governance and other requirements of general application such as cyber hygiene. They will also be required to maintain a base capital that is lower compared to that of MPIs. However, SPIs will not be allowed to have a monthly transaction volume exceeding S$3 million in respect of any one payment service, or S$6 million in respect of two or more payment services, or a daily e-money float exceeding S$5 million, with these limitations computed on an averaged basis over a calendar year.

While MPIs, on the other hand, will not be subject to such limitations, a corresponding higher and more onerous level of regulation will be imposed in line with the risks presented with the funds handled. Each MPI will be required to maintain security of a prescribed amount with MAS for the due performance of its obligations to its users. MPIs engaged in certain regulated payment activities will also be required to comply with user protection measures such as by having customer funds deposited in a trust account when received.

Excluded Payment Activities

The Bill contains a number of exclusions or carve-outs for payment activities that do not pose sufficient risk to warrant regulation under its licensing regime. The three most significant exclusions being:

  1. Limited Purpose E-Money
  2. Limited Purpose Digital Payment Token
  3. Regulated Financial Services

The "Limited Purpose E-Money" exclusion is intended to carve-out payment services involving e-money that can only be used for the purchase of a limited range of goods and/or services (eg those provided by the e-issuer, or a merchant within a limited network of merchants that is associated with the issuer, etc.), or in loyalty programmes which are generally of a lower quantum, carry low ML/TF risks and are limited in consumer reach. Likewise, the "Limited Purpose Digital Payment Token" exclusion is intended to carve-out payment services involving non-monetary consumer loyalty or reward points or in-game assets that satisfy the definition and conditions stipulated in the Bill. These can potentially operate to exclude rewards/points cards or paper-based vouchers.

The "Regulated Financial Services" exclusion seeks to exclude payment services conducted by licensed or exempt entities regulated under certain prescribed legislation such as the Financial Advisers Act and the Securities and Futures Act, but only to the extent that such payment services are considered to be solely incidental to or necessary for those licensed or exempt entities to carry out the activity for which it is regulated (or exempt) under those prescribed legislation. While the Bill has provided for some clarity on what constitutes "incidental", this issue may still be a matter of considerable debate as it is in practice not easy to definitively conclude what constitutes "incidental".

Transitional Arrangements

As the PSOA and the MCRBA will be repealed at the commencement of the Bill, the Bill provides for transitional arrangements for existing regulated entities, as well as powers to make transitional arrangements for entities that are providing regulated payment services, but are currently not regulated.

Transitional arrangements of between six and 12 months will be provided to facilitate a smooth transition of these entities into the new regulatory framework under the Bill, and allow these entities with sufficient lead time to comply with the new requirements.

It would be timely for participants in the payment ecosystem to carefully consider the requirements of this new payments framework given the significant changes entailed. One instance is in relation to operators and holders of SVFs under the current PSOA regime. These service providers would undoubtedly be concerned, for while the "light-touch" regime under the PSOA operates on holders based on stored value of S$30 million or less, there is no direct equivalent under the new regime.

As the operation of SVFs would most likely be classified as "account issuance services" and/or "e-money issuance services" under the new regime, existing operators and/or holders are advised to consider the requirements under this new regime.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions