Payment Services Act (Singapore)— What are your next steps?
The Payment Services Act 2019 (No. 2 of 2019) (the “PS Act”) came into force on 28 January 2020, repealing the Payment Systems (Oversight) Act (the "PS(O)A") and the Money-changing and Remittance Businesses Act (the "MCRBA"). All businesses that carry out one or more regulated payment activities under the PS Act will require a payment service provider licence. Click here for details on the regulated payment services.
What are your next steps?
(i) Businesses that were previously regulated under the MCRBA and/or PS(O)A
For entities conducting businesses that were previously licensed under the MCRBA and/or the PSOA, there are transitional arrangements that may allow such entities to be grandfathered under the PS Act as major payment institution licence holders and/or money-changing licence holders.
(ii) Businesses Previously Unregulated under the MCRBA and/or the PSOA
MAS has indicated that a temporary exemption from the licensing requirement under Section 5(1) of the PS Act would be available for entities that provide payment services that were previously unregulated under the MCRBA and/or the PSOA. Unregulated payment services include (i) a merchant acquisition service, (ii) a digital payment token service, (iii) an account issuance service, (iv) a cross-border money transfer service with respect to inbound remittance, and (iv) an e-money issuance service with an e-money float of less than S$30 million.
To avail themselves of the temporary exemption, entities should notify MAS of the date on which they started providing the relevant specific payment service before the PS Act came into force (i.e. 28 January 2020). The period to notify MAS is from 28 January 2020 to 27 February 2020.
Upon a successful notification, such entities would be exempt from the licensing requirements for a grace period of six to 12 months, depending on the type of regulated payment service. If an entity submits an application for a payment service provider licence during the relevant grace period, the entity will be exempt from the licensing requirements under the PS Act from the date of such application until the application is approved or rejected by MAS or withdrawn.
(iii) Businesses that have not commenced
Entities that are currently not conducting a regulated payment service will not be able to avail themselves of the temporary exemption. The relevant entity will only be able to operate a business in respect of the regulated payment service after it has made a licensing application to MAS and been granted a payment service provider licence.
The opinions expressed in this article are my own and do not represent the opinions of my employer. This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a suitably qualified lawyer in your jurisdiction. The author does not accept or assume any responsibility or liability in respect of this article.
