What is Singapore Payment Services Act?

The Singapore Payment Services Act (PSA) was enacted to regulate the payment services industry in Singapore. The act is enforced by the Monetary Authority of Singapore (MAS).

The MAS issues licences to payment service providers (PSPs) who wish to provide payment services in Singapore.

In order to be eligible for a licence, applicants must meet certain requirements such as having satisfactory financial resources and technical and organisational capabilities. The application process also requires the submission of detailed information on the proposed business model and operating arrangements.

This article is a helpful resource for businesses that are interested in providing payment services in Singapore. It provides an overview of the eligibility criteria and application process, as well as key considerations for PSPs when setting up their operations

What activities are governed under the Payment Services Act (PSA)?

The PSA governs the following activities:

1. Account issuance services – issuing, maintaining or operating a payment account in Singapore. (e.g. e-wallets, non-bank credit cards)
2. Domestic money transfer services – payment transactions executed through a payment account domestically such as payment gateway services and payment kiosks services in Singapore
3. Cross-border money transfer services – services facilitating inbound and outbound money transfer, whether as principal or agent
4. Merchant acquisition services – provision of point of sale terminals, or online payment gateways to accept and process payments on behalf of the merchants
5. E-money issuance – provision of electronically-stored monetary value denominated in any currency for future payments and transfers to other individuals
6. Digital payment token services – service of dealing in digital payment tokens or facilitating the exchange of digital payment tokens
7. Money-changing service – buying or selling of foreign currency notes in Singapore

What are the different license types in the Payment Services Act (PSA)?

Depending on the services your company wishes to provide, there are three license types that you can apply for.

1. Money Changing License
2. Standard Payment Institution License
3. Major Payment Institution License

Money Changing License

A Money Changing License allows companies to exchange Singapore Dollars and foreign currency. The license also permits the provision of other services such as cross-border money transfers and cheque cashing.

Standard Payment Institution License

The Standard Payment Institution License is for companies that wish to provide payment services such as

• debit card issuance and acceptance
• prepaid cards
• e-money issuance and acceptance
• player-initiated credit card transactions
• person-to-person fund transfer services.

The Standard Payment Institution License is subjected to the following thresholds:

1. Monthly payment transactions up to S$3 million for any payment service
2. Up to S$6 million for two or more payment services monthly
3. Less than or equal to S$5 million of daily outstanding e-money for e-money issuance services

Major Payment Institution License

The Major Payment Institution (MPI) license is for companies that wish to provide all forms of payment service. This includes the provision of debit cards, as well as Singapore Dollar, denominated e-money.

The Major Payment Institution License is subjected to the following thresholds:

1. S$3 million monthly transactions for any activity type.
2. S$6 million monthly transactions for two or more activity types.
3. S$5 million of daily outstanding e-money for e-money issuance services.

Who Is Eligible To Apply?

Eligibility For Money-Changing License

1. The individual applicant, partners or directors of the company applying should have at least 1 year of relevant working or business experience on a full-time basis.
2. For sole proprietors, the applicant must be a Singapore citizen.
3. For partnership or limited liability partnership, the majority of its partners should be Singapore citizens. If there are only two partners, only one needs to be a Singapore citizen.
4. For a Singapore-owned company, more than 50% of the equity shareholdings should be beneficially owned and effectively controlled by Singapore citizens. A majority of the board of directors of the company should be Singapore citizens. If there are only two directors, only one of the directors needs to be a Singapore citizen.
5. For a Singapore incorporated wholly-owned subsidiary of a foreign bank, or a foreign company primarily engaged in money-changing, the parent company needs to:

• be of significant size. in the case of a foreign bank, it needs to rank among the top banks in the country where it is incorporated
• possess a good track record and reputation
• be adequately regulated and supervised by its home supervisory authority for AML/CFT

Eligibility For Standard Payment Institution License

The applicant must

1. be a Singapore-incorporated company or a foreign corporation registered in Singapore
2. have a permanent place of business or registered office
3. have a minimum base capital of S$100,000
4. The applicant’s board of directors should have either:

• at least 1 executive director who is a Singapore Citizen or Singapore Permanent Resident
• at least 1 non-executive director who is a Singapore Citizen or Singapore Permanent Resident and at least 1 executive director who is a Singapore Employment Pass Holder

Eligibility For Major Payment Institution License

The applicant must

1. be a Singapore-incorporated company or a foreign corporation registered in Singapore
2. have a permanent place of business or registered office
3. have a minimum base capital of S$250,000
4. The applicant’s board of directors should have either:

• at least 1 executive director who is a Singapore Citizen or Singapore Permanent Resident
• at least 1 non-executive director who is a Singapore Citizen or Singapore Permanent Resident and at least 1 executive director who is a Singapore Employment Pass Holder

How does one get licensed?

Besides having the pre-requisite stated above, MAS will also consider the following when assessing the application:

Money-Changing Licence

1. Fitness and propriety of the applicant; and in the case of a company, partnership or limited liability partnership, the fitness and propriety of its management
2. The financial condition of the applicant, and in the case where the applicant is a company, partnership or limited liability partnership, its track record and financial performance in previous years
3. Ownership and shareholding structure
4. Qualifications and experience, particularly in operating a money-changing business and in anti-money laundering and countering the financing of terrorism (AML/CFT)
5. Business plan and model, including AML/CFT policies and procedures
6. Whether the public interest will be services by granting a licence

Standard and Major Payment Institution Licence

1. Fitness and propriety of the controllers and directors
2. Governance structure
3. Qualifications and experience in operating a payment services business and compliance with regulatory requirements
4. Financial condition and track record
5. Business plan and model, including operational readiness
6. Ability to comply with obligations under the PS Act, including compliance, safeguarding, technology risk management and audit arrangements
7. Regulatory status in other jurisdictions, where applicable
8. For applicants with a holding company, commitment to operations in Singapore
9. Whether the public interest will be served by granting a licence

How long will the licence granted be valid?

The licence is valid until either

1. it is revoked by MAS
2. it lapses
3. the licensee surrenders its licence

How much is the application fee?

The application fee is non-refundable. 

1. Money-changing licence: S$500
2. Standard payment institution licence: S$1,000 or the sum of the amounts below for the payment services applied for whichever is higher
3. Major payment institution licence: S$1,500 or the sum of the amounts below for the payment services applied for whichever is higher

How much is the annual licence fee?

1. Money-changing licensees: S$1,500
2. Standard payment institutions: S$5,000 or the sum of the amounts below for the payment services provided, which is higher
3. Major payment institutions: S$10,000 or the sum of the amounts below for the payment services provided, which is higher

If you are keen to apply for a licence under the Payment Services Act (PAS) but are unsure of the process, please feel free to contact us for a non-obligatory discussion. Our professional team are fully trained to assist you in this process.