The Payment Services Act (“the Act”) came into force on 28 January 2020 providing new framework for the regulation of payment systems and payment service providers in Singapore. The Act consolidates the previous Payment Systems (Oversight) Act 2006 and the Money-Changing and Remittance Business Act 1979. The Act recognizes seven types of payment services. The Act also provides for three classes of licences whose regulatory requirements differ according to the risks posed by each services provided under each licenses. All approved holders of widely accepted stored value facilities and licensed remittance agents have been deemed to be major payment institutions under the Act and holders of money-changer’s licences have been deemed to as holders of money-changing licences under the Act. Entities providing new payment services other than digital payment token service providers must submit their licence application before 27 January 2021 and digital payment tokens service providers have to submit by the 27 July 2020. All entities are also required to notify MAS by 27 February 2020 on the date they commenced the business of providing the specific payment services under the Act. Below we discuss key compliance obligations to adhere to:
Companies applying under the Standard and Major Payment Institutional Licences are required to maintain minimum base capital requirement. Standard payment institutions and major payment institutions must maintain minimum base capital of S$100,000 and S$250,000 respectively. Entities licensed under money-changers are currently not required to maintain a minimum base capital. Base capital refers to sum of:
Major payment institutions are also required to maintain a security deposit of S$100,000 (if the average, over a calendar year, of the total value of all payment transactions that are accepted, processed or executed by the licensee in one month, does not exceed S$6 million of its equivalent in a foreign currency), for any one payment service it provides) or S$200,000 in any other cases. The security deposit is typically required to be provided in the form of cash or bank guarantee.
All payment service providers who have been conducting payment services prior to commencement of the Act must submit the Notification of Provision of Payment Services for the purposes of Exemption from Holding a Licence under the Payment Services Act 2019 for the Specified Period form. This is to be submitted prior to 27 February 2020. New entities intending to do payment services are required to submit the following forms:
The guide below sets out the high-level summary of ongoing filing obligations applicable to each type of payment activities licensed under the Act