Singapore: Implemented Payment Services Act (PS Act) including licensing requirement for payment service providers

On 30 June 2022, all the Payment Services Act (PS Act) sections entered into force. The Act regulates seven payment activities, including account issuance services, domestic money transfer services, cross-border money transfer services, merchant acquisition services, e-money issuance services, digital payment token services, and money changing services. Payment service providers engaged in any of these activities are required to obtain one of three licenses under the PS Act: the Major Payment Institution (MPI) Licence, the Standard Payment Institution (SPI) Licence, or the Money Changing (MC) Licence, based on the specific activities they undertake. The Major Payment Institution (MPI) Licence must be obtained by all providers that are Singapore-incorporated or have a permanent place of business and registration in Singapore and that offer any of the seven defined payment services without any exception to certain thresholds. However, if the base capital of the payment provider is below SGD 250'000, the provider is exempted from the licensing obligation. The Standard Payment Institution (SPI) Licence must be obtained by all providers that are Singapore-incorporated or have a permanent place of business and registration in Singapore and that offer any combination of the seven defined payment services. If the payment provider enables monthly transactions for one payment service that average below SGD 3 million, if the payment provider enables monthly transactions for two or more payment services that average below SGD 6 million, or if the payment provider has an average daily outstanding e-money float below SGD 5 million, the provider is exempted from the SPI licence. However, if the base capital of the payment provider is below SGD 100'000, the provided is exempted from the licensing obligation. Lastly, the Money Changing (MC) Licence must be obtained by all providers that offer money-changing services that are operated by sole-proprietorship, partnership, or limited liability partnership by a Singapore-owned or foreign-owned company, without any exception to certain thresholds. However, the provider must have a permanent place of business or registered office in Singapore to fall within the obligations of the MC licence.