Singapore’s new payment services framework, the Payment Services Act (PS Act), effective from 28 January 2020, is an activities-based, risk-proportionate regulatory regime governing payment service providers (PSPs) and designated payment systems (DPS). The PS Act and the various subsidiary regulations, notices, guidelines and FAQs which supplement it are the outcome of extensive industry consultation undertaken by the Monetary Authority of Singapore (MAS).
This overview provides high-level guidance for PSPs on navigating the PS Act, focusing on the practical considerations that are relevant for PSPs wishing to assess their regulatory position.
Which activities are regulated under the PS Act?
The following is a simplified overview of the licensable activities under the PS Act, together with (non-exhaustive) examples of in-scope business models and licensing exemptions.
Some of the above activities were, in substance, already regulated prior to commencement of the PS Act, under the Money-changing and Remittance Businesses Act (Cap. 187) (MCRBA) and the Payment Systems (Oversight) Act (Cap.222A) (PS(O)A). The PS Act replaces these previous frameworks and widens the scope of regulation. In particular, the domestic money transfer service, merchant acquisition service and DPT service represent services which are newly regulated under the PS Act, while the scope of the account issuance service, cross-border money transfer service and e-money issuance service is broader than the scope of the similar, previously regulated activities.
In addition to regulating PSPs, the PS Act will set out requirements for DPS, such as NETS, FAST and GIRO. Under the PS Act, the position of operators, settlement institutions and participants of a DPS will remain largely similar to the previous position under the PS(O)A. The regulatory categories of PSP and DPS are not mutually exclusive, and a firm may operate as both.