Payment Services Act
Effective January 2020, the Payment Services Act regulates payment systems and payment service providers in Singapore — superseding the previous acts.
It provides for regulatory certainty and consumer safeguards, while encouraging the growth of payment services and FinTech. Amendments relating to anti-money laundering (AML) and countering terrorist financing (CTF), cross-border money transfer services and digital payment token (DPT) services were introduced in a revised bill, which was passed in January 2021.
Under the revised act, among other changes, the definition of cross-border money transfer services has been expanded to include providers in Singapore of cross-border money transfers between entities in different countries — where the moneys are not necessarily accepted or received in Singapore.
Seven payment service activities under the Act
Account Issuance
Issuing or operating a payment account (for example, an eWallet) in Singapore.
Domestic Money Transfers
Providing local funds transfer services, including payment gateway services and payment kiosk services.
Cross-border Money Transfers
Providing remittance services in Singapore.
Merchant Acquisition
Contracting with a merchant to accept and process payment transactions resulting in a transfer of money to the merchant.
E-Money Issuance
Issuing e-money in Singapore to allow users to make payments or transfers of e-money.
Digital Payment Tokens
Buying and selling of virtual currency, or providing a platform allowing persons to exchange virtual currency in Singapore.
Money Changing
Buying and selling of foreign currency notes.
Three licence categories for payment service providers
Providers of payment services are required, depending on the services they provide, to hold one of three licences.
Money-changing licence
Covers money-changing services only.
Standard payment institution licence
For providers of one or more payment services, subject to specified transaction thresholds.
Major payment institution licence
For providers whose activities exceed the thresholds set for a standard institution.
Payment Services Act — PS Notice 01
PSN 01 depicts the regulatory requirements for Anti Money Laundering which Payment Services Licensees need to follow.
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