The Payment Services Act came into effect in January 2020 to regulate payment systems and payment service providers in Singapore, superseding the previous acts.
There are seven payment service activities under the Act as described below:
- Account Issuance – issuing or operating a payment account (for example, an eWallet) in Singapore;
- Domestic Money Transfers – providing local funds transfer services, including payment gateway services and payment kiosk services;
- Cross-border Money Transfers – providing remittance services in Singapore;
- Merchant Acquisition – providing services where the service provider contracts with a merchant to accept and process payment transactions resulting in a transfer of money to the merchant;
- E-Money Issuance – issuing e-money in Singapore to allow the users to make payments or transfers of eMoney;
- Digital Payment Tokens Dealing or Exchange – including the buying and selling of virtual currency or providing a platform allowing persons to exchange virtual currency in Singapore;
- Money Changing – buying and selling of foreign currency notes.
It provides for regulatory certainty and consumer safeguards, while encouraging the growth of payment services and FinTech. Amendments relating to anti-money laundering (AML) and countering terrorist financing(CTF), cross-border money transfer services and digital payment token (DPT) services were introduced in a revised bill, which was passed in January 2021.
Under the revised act, among other changes, the definition of cross-border money transfer services has been expanded to include providers in Singapore of cross-border money transfers between entities in different countries where the moneys are not necessarily accepted or received in Singapore.
Providers of payment services are required, depending on the services they provide, to hold one of three licenses:
- a money-changing license,
- a standard payment institution license, or
- a major payment institution license.