The new Payment Services Bill
The new Payment Services Bill (No 48/2019) (the “Bill”) was recently submitted for a first reading in the Singapore Parliament on 19 November 2018. The Bill will consolidate the various payments regulations and replace the existing legislation, which primarily comprises the Money-changing and Remittance Businesses Act (Cap 187, 2008 Rev Ed) (the “MCRBA”) and the Payment Systems (Oversight) Act (Cap 222A, 2007 Rev Ed) (the “PSOA”).
The Bill was introduced to meet the needs of end users in the rapidly changing landscape of payment systems in Singapore. The emergence of payment technologies such as digital tokens and e-wallets, which do not fall neatly within the scope of the existing regime, has created new risks that the Bill intends to mitigate.
The Bill is structured such that there are two parallel regulatory schemes: one allowing the Monetary Authority of Singapore (“MAS”) to designate key payment systems, and the other an umbrella licensing regime under which a licensee will only need one licence to carry out one or more regulated activities. Such activities include, among others, account and e-money issuance, and domestic and cross-border money transfers. For example, an e-wallet provider, which holds stored value of less than SGD 30 million in its stored value facility (“SVF”), does not require a licence under the existing regime. However, under the Bill, every e-wallet provider will be required to obtain either a Standard Payment Institution Licence or Major Payment Institution Licence. The extent of the regulations applicable to a licensee will be tailored depending on the nature of its regulated activities and the attendant risks (e.g. risks relating to money laundering and terrorism financing, user protection, interoperability, and technology). MAS has mentioned that companies will have between a six to 12 month grace period to adjust to the new framework and apply for the relevant licence.