Singapore Payment Services Act: Objectives & Licenses Classification

Payment Services Act, Singapore’s businesses that are associated with payment systems or services should be aware of the licensing rules and the obligations that are enshrined within this AML as well as CFT regulations.


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    Overview: Singapore Payment Services Act

    In this post, we gonna know about the new regulations on payments in Singapore, that were put into effect with the recent passing of the Payment Services Act.

    The creation of this legislation was led by Singapore’s Monetary Authority of Singapore and it is intended to create an efficient and secure e-payments infrastructure in Singapore while protecting consumers and enhancing consumer confidence about the use of electronic payments.

    The Act creates an authorization framework for various payment services and recognizes advances in technology and innovation in the field of payment services.

    The Act also broadens the Monetary Authority’s regulatory area to include new forms of payment-related services like digital payment tokens.

    What is the Payment Services Act?

    To be in compliance with Payment Services Act, Singapore’s businesses that are associated with payment systems or services should be aware of the licensing rules and the obligations that are enshrined within this AML as well as CFT regulations.
    The new law is designed to achieve two primary goals; The first one is to safeguard the stability of the financial system in Singapore and to ensure fair competition between market players & the second goal is for MAS to create licensing rules and direct supervision of payment systems as well as companies that provide payment services to make sure they merge with Anti Money Laundering & opposing the Financing of Terrorism regulations. 

    Singapore is regarded in the top ten of top financial centers. It has world-class options for banking & financial services for corporate clients. One of the fastest-growing areas in the country’s finance sector is the modernization of payments and the infrastructure that supports these services.

    Singapore is witnessing rapid technological advancement in this sector, and a variety of well-funded startups have been created in Singapore. It is important to note that the Singapore Government has kept abreast of the latest innovations and technological advancements by changing its regulatory framework whenever necessary. 

    What is the objective Of the New Payment Services Act Singapore?

    The Payment Services Act offers a solo framework for a payments service, which results in the convergence of all several payment activities.

    Enhance the opportunity of regulation that the MAS to encompasses 7 kinds of payment services which contain digital payment method services as well as merchant ways.

    Creates a modular and risk-based regulatory framework that allows the rules can be adapted to accommodate the range of services provided to service suppliers. Eventually, it had two regulatory schemes are involved, I.e. licensing and designation regimes;

    Designation Regime

    Certain payment systems can have the status of being “designated for closer supervision” following the Payment Services Act if they are essential to the security and effectiveness of the banking system in Singapore.

     The 3 classification categories include systems that are deemed as Systemically Important Payment Systems (SIPS); System-Wide Important Payment Systems (SWIPS) and any other designation that authorities believe is important for the public good to recognize as the case.

    • SIPS are systems that if they fail could result in ripple-effect disruption to other participants, or a disruptive systemic impact on the system of finance in Singapore. For instance, this could be the case with MEPS+, which is the MAS Electronic Payment System (MEPS+).
    • SWIPS is another mode in which failure can impact the public’s elegance in the payment procedure and the financial method in Singapore. 

    SWIPS comprises the necessary terms which include Fast and Secure Transfers (FAST) as well as the Singapore Dollar Cheque Clearing System and the US Dollar Cheque Clearing System The Interbank GIRO (IBG) System, and the Network for Electronic Transfers.

    • The designation rules affect only the largest and most important systems. It would not likely affect smaller payment solutions or services that entrepreneurs could create.

    The Licensing Regime

    The payment system must get a license when they offer certain services for payment under the Payment Services Act. You are required to get the required license when you offer any of the following services:

    • Account issuances are services. These involve such services which provide payment accounts to clients or implicate the action that is required by a payment account. Examples include credit cards that are not bank-issued and e-wallets.
    • Transfer services for money. This refers to services that allow for the transfer of money domestically within Singapore including electronic payment gateways, as well as physical kiosks for payment.
    • Transfer of money internationally. Services that perform the transfer of funds across borders into the country and out of Singapore.
    • Service for acquiring merchants. Service providers that manage transactions for merchants on their behalf. For instance, payment gateways, or point-of-sale terminals for cards.
    • Services for changing money.  Services that facilitate the purchase and sale of foreign currency in Singapore and around the world, including payment service providers online and companies that profit through the trading of tangible currency.

    Additionally, it is also important to note that the Payment Services Act has an expanded coverage that covers services connected to virtual assets and currencies. Therefore the PSA is also applicable to:

    • E-money services for issuance. These cover services that allow the issue of e-money which customers can keep in their e-wallets, transfer to other people or make use of to pay for products and services.
    • The digital token service. It gives exchange assistance for digital payment tokens (DPT) or places for the selling & buying of DPT which are also referred to as a cryptocurrency, in Singapore.

    The law doesn’t require the need for a license to:

    • Payment instrument aggregators – service providers that permit merchants to take electronic or mobile transactions. They permit businesses to accept debit and credit card transactions without establishing an account with banks. These providers don’t handle funds, but rather keep and transmit information about payments;
    • Platforms for data communication that transfer financial information;
    • Market participants who provide services to financial institutions.

    Various Classes of Licenses For Payment Services

    If your company is engaged in any of these actions, you’ll need select one of the three categories of licenses. Each is tailored to the risk posed by the nature & opportunity of the assistance that the licensee offers.

    1. The standard license for payment institutions

    If you are operating a standard-issued establishment and hold the required license, you can offer any of the above seven specified payment services however, they must be within the specific transaction flow or money float thresholds set by the Payment Services Act. The following limits apply:

    Transaction Value: The monthly average of transactions for any activity should be lower than SGD 3.0 million (average for one entire calendar year).

    E-Money Float: A daily average e-money float has to be lower than SGD 5,000,000 (average for one calendar year).

    These licensees’ activities are generally regulated lightly.

    2. Major licensing of a payment institution

    Those institutions accumulating huge payment institution licenses could perform all 7 kinds of payment systems that exceed the required transaction flow, or the online money float thresholds. Due to the magnitude of their operations carrying more risk, they’re subject to greater regulations.

    3. License for money-changing

    Under the Money-changing license, you are only able to provide the services of changing money. In the Payment Services Act, these are controlled similarly as they were in the past MCRBA.

    Let’s look at the three kinds of licenses more thoroughly.

    1) Standard Pay Institution License

    Traditional payment licensees can offer any of the seven payment services defined insofar as the amount is not exceeding the thresholds specified by the Act. The keywords to remember about the thresholds include:

    • 3 million dollars in transactions per month for all payment services (other than e-money accounts issuance as well as money-changing and issuance services);
    • Monthly transactions of S$6 million for 2 or more options (other than money-changing and e-money account opening services);
    • S$5 million in daily outstanding electronic money.

    Noting that companies that offer payment services that go beyond the thresholds, need to obtain a Major Payment Institution Licence.

    Who is able to apply?

    The MAS has set out the required conditions for applicants:

    • The candidate should be a Singapore-incorporated firm or an abroad institution listed in Singapore;
    • The candidate should even contain a permanent regional of a business or a registered office;
    • The applicant should possess a least the capital of S$100,000
    • The board of directors for the applicant must comprise of:

    There should be 1 non-executive administrator who is a Singapore native or Singapore permanent resident, or

    • It’s should have 1 administrative director who has a Singapore Employment Pass Holder.

    Admission Criteria

    When assessing an application MAS will take into account the following factors:

    • The fitness and integrity of directors and controllers;
    • Governance structure;
    • Experience and qualifications, especially in running a payment services business and in compliance with regulations;
    • The financial condition and track record;
    • Model and business plan that includes operational readiness;
    • The ability to meet obligations in the Payment Services Act, including compliance with the Payment Services Act, technology risk management, and audit arrangements
    • The status of regulatory authorities in other countries, where the law is applicable.
    • For a candidate who has a holding firm, which is committed to working in Singapore;
    • The public interest can be worked by allowing

    License Fee

    Standard banks are required to pay a license fee each year dependent on the type of payment service they are licensed to provide. The fees are outlined in law and amount to typically S$5,000.

    2) Major Payment Institution Licence

    The Major Payment Institution Licence is the most complete license. The holder of the license can offer all seven stipulated payment services, without being bound by any limitations.

    Who is able to apply?

    The MAS’s requirements for the selection of applicants are as follows:

    • The candidate should be a Singapore-incorporated firm or an abroad institution listed in Singapore;
    • The candidates should possess a permanent space for business or a have a government listed office situated in Singapore;
    • The minimum base capital of the applicant has to be $250,000.
    • The board of directors for the applicant must comprise of:
    • It should have one executive administrator that is a Singapore resident or Singapore permanent resident or it should have one executive administrator who is a Singapore permanent
    • It should possess one non-executive administrator who is a Singapore citizen or Singapore permanent citizen, & it should contain one executive administrator who is a Singapore Employment Pass holder.

    Admission Criteria

    In evaluating an application, MAS will consider the same elements that it would for the Standard Payment Institution License, which include the suitability and propriety of the directors and controllers as well as the management structure, financial condition, track record so on. 

    MAS examines each form according to its capability & might consider other aspects on a term-by-term basis.

    License Fee

    The major banks must pay an annual license fee The amount payable is contingent on the type of payment they are authorized to provide. The fees are stipulated by law and amount in the range of S$10,000.

    3) Money-Changing Licence

    Licensees who are licensed to conduct money-changing transactions can only offer cash-transfer services, specifically the purchase or selling of notes of foreign currency. Companies offering other payment services should have a standard license for payment institutions or a major licensing for payment institutions instead.

    Who is able to apply?

    The law requires that individuals who are applicants, partners, and directors in a corporation seeking this license be able to demonstrate a minimum of one year of relevant business or working experience, on a full-time basis.

    The following requirements for governance are also required to be met:

    • Individuals

    The applicant should be a Singapore citizen, for applying for single proprietors.

    • Partnership or Limited Liability Partnership

     Most of the members of the firm must of Singapore residents. If there are just 2 partners in the partnership, 1 has to be a Singapore resident.

    • Singapore-owned company

     More than 50 percent of equity shares should be owned by Singapore citizens and managed through Singapore citizens. The majority of the directors ought to include Singapore citizens. If there are just two directors, just one director needs to be a Singapore citizen.

    • Foreign-owned Company

     In some conditions of a Singapore firm, a completely capitalized subsidiary of an abroad bank, or abroad firm mainly immersed in money-changing, the parent firm must:

    • Have a sufficientIf it is an international bank it must be in the top five banks within the country in which it’s established.
    • Have a solid track history and reputation i.e. to ensure the provisions of the “fit & correct” test.
    • be adequately monitored and controlled by the authority that is its supervisory home to ensure compliance with AML as well as CFT.

    Admission Criteria

    MAS evaluates forms holistically, & generated licenses in an individual manner. In deciding, the authority considers things like:

    • Property and fitness of the applicant; and, in the instance of a corporation or limited liability partnership the integrity and fitness of its management
    • The financial situation of the applicant and, when it is a business or partnership, or a limited liability partnership its track record and financial performance from the previous years;
    • Structure of ownership and shareholding;
    • Experience and qualifications, especially in the operation of a business that deals with money and in observing anti-money laundering and combating the financing of terrorist regulations.
    • Model and business plan that includes AML and CFT procedures and policies;
    • If the public’s interest will be served by the granting of an authorization.

    App Fee, Payment Method, and Application Fee

    All applicants must be able to pay an application cost of S$500 as well as an annual license charge of $2,500.

    Processing Time

    Each application is assessed on a case-by-case basis, processing times will vary based on the particular circumstances of each application and the accuracy of the information provided. Every application is processed swiftly.

    Risk Mitigation Within Payment Services

    The rules outlined within the Payment Services Act are designed to reduce four major risks that are common to all payment systems. The four risks are as follows:

    1. Protection of the user

    The new law obliges major payment institutions to ensure that customer funds are not lost due to insolvency through one of these methods:

    • A commitment or guarantee from any prescribed bank or bank or financial institution located within Singapore to be completely responsible to the customer for the monies they receive;
    • When the money is received, it directly gets deposited into a trust account of the firm.
    • Protecting in any other way as is decided by the MAS.

    2. CFT and AML

    Payment services may be used to facilitate the financing of terrorism or money laundering purposes. 

    The proper AML or CFT rules can be enforced by MAS on licensees with relevant licenses via notices pursuant to the MAS Act. Transactions with low risk are exempt from AML and CFT obligations.

    3. Interoperability

     The Payment Services Act provides MAS official powers to ensure the interoperability between payment methods for the benefit of consumers as well as the advancement of the market. 

    The plan is to create a common standard to enable widely-used payment acceptance systems to interoperable.

    4. Risk management for technology

     The new law allows MAS to enforce technology risk management conditions on all licensees, for example, cyber-security risk-management requirements. Payment service providers must ensure there is sufficient risk governance and implement mitigation plans. 

    Particular attention should be given to areas like user authentication, protection against data loss, and cyber-attack prevention as well as detection.


    The Payment Services Act offers a new system for regulating payment systems and providers of payment methods in Singapore. Its goal is to enhance consumer protection and boost confidence in the use of electronic payments.

     The Act establishes a designation system as well as a licensing system that recognizes the latest developments in payments. If you want to know more about Singapore Payment Services Act, we are ODINT Consultancy, here to help you out in each & every step of yours.


    The Singapore Payment Services Act is a simple workflow for the operation of payment services & payment service offerers in Singapore.

     The objective of A Singapore Payment Services Act includes 2 regulatory schemes:

    • Designation regime
    • Licensing regime

    The Payment Services Act was approved by Parliament on 14 Jan 2019, & came to work on 28 Jan 2020.