MAS issues public consultation paper on new payment services Bill

SINGAPORE — The Monetary Authority of Singapore (MAS) has laid out its proposals to cater regulations to the rapid developments in electronic payments.

In a publication consultation paper published on Tuesday (Nov 21), the MAS said it plans to categorise activities along the financial services value chain into seven groups of services: Account issuance, domestic money transfer, remittance, merchant acquisition, electronic-money issuance, virtual currency, and money-changing.

All these activities carry money laundering or terrorism financing risks except for merchant acquisition services and e-money issuance, MAS noted.

The central bank said: “One key observation made was that new payment services enabled by evolving technology were falling outside of the existing regulatory frameworks despite presenting risks to the system as a whole.”

It added: “This resulted in a situation where consumers were adopting less secure services to make and receive payments. These included digital and online platforms that were exposed to sophisticated cyber criminals.”

MAS managing director Ravi Menon had announced last week that the MAS will publish the Payment Services Bill for public consultation. He described the Bill as seeking to “right-size” e-payment regulations. Licensees will be regulated according to the activities they conduct, because different activities pose different risks, he had said.

This is the second consultation paper on the payments regulatory framework. In August last year, the MAS published a paper seeking public views on the regulation of all payment activities in the ecosystem.

Feedback received then was that the proposed areas of regulation were “too broad,” which might result in over-regulation and stifle innovation. 


The public consultation, which ends on Jan 8, is seeking views from the general public as well as various stakeholders such as businesses, financial institutions and financial technology (FinTech) firms. MAS said it plans to draft the Bill next year.

Among the areas which feedback is being sought are measures to protect users and personal e-wallets. For example, whether an e-wallet size restriction of S$5,000 and transaction flow cap of S$30,000 are suitable.

MAS noted that recent developments in FinTech have led to the convergence of payment and remittance services, making it necessary for the central bank to modernise existing regulatory frameworks.

The proposed regulatory framework will have an impact on financial institutions including banks and finance companies, MAS said.

To cushion this, MAS is proposing a six-month grace period for newly-regulated entities to submit their licence application. This would give the industry more time to adjust to the new framework.

There will be at least two more consultation papers to be published, MAS said. These will be on e-payment guidelines which include fraud and error resolution processes, and standards on the protection of access to funds.