There are two types of Payment Institution licences issued by the Monetary Authority of Singapore (MAS) under the Payment Services Act. They are the Standard Payment Institution Licence and the Major Payment Institution Licence.

 

The Payment Institution Licences will allow licence holders to provide any of the seven payment services that are regulated by the act. These services are set out in section 6(4) of the PSA.

 

Section 6(4) of the PSA states:

 

A person must have in force a standard payment institution licence or a major payment institution licence to be entitled to carry on a business of —

(a) providing one of the following payment services:
(i) an account issuance service;
(ii) a domestic money transfer service;
(iii) a cross‑border money transfer service;
(iv) a merchant acquisition service;
(v) an e‑money issuance service;
(vi) a digital payment token service; or

(b) providing 2 or more of the following payment services:
(i) an account issuance service;
(ii) a domestic money transfer service;
(iii) a cross‑border money transfer service;
(iv) a merchant acquisition service;
(v) an e‑money issuance service;
(vi) a digital payment token service;
(vii) a money‑changing service.

 

In summary, the seven payment services are:

  1. Account issuance service
  2. Domestic money transfer service
  3. Cross-border money transfer service
  4. Merchant acquisition service
  5. E-money issuance service
  6. Digital payment token service
  7. Money-changing service

 

 

The Standard Payment Institution Licence has specified thresholds whereas the Major Payment Institution Licence does not. These thresholds are stated in section 6(5) of the Payment Services Act 2019 (PSA).

 

Section 6(5) of the PSA states:

Despite subsection (4), a licensee must have in force a major payment institution licence if —

 

(a) both of the following apply:

(i) the licensee carries on a business of providing one or more of the following payment services:
(A) an account issuance service (other than an e‑money account issuance service);
(B) a domestic money transfer service;
(C) a cross‑border money transfer service;
(D) a merchant acquisition service;
(E) a digital payment token service;

(ii) the average, over a calendar year, of the total value of all payment transactions that are accepted, processed or executed by the licensee in one month exceeds —
(A) $3 million (or its equivalent in a foreign currency), for any one of those payment services; or
(B) $6 million (or its equivalent in a foreign currency), for 2 or more of those payment services;

 

(b) both of the following apply:

(i) the licensee carries on a business of providing an e‑money account issuance service;

(ii) the sum of the following amounts exceeds $5 million (or its equivalent in a foreign currency):
(A) the average, over a calendar year, of the total value in one day of all e‑money that is stored in any payment account issued by the licensee to a person whom the licensee has determined, according to such criteria as the Authority may specify by notice in writing, to be resident in Singapore;
(B) the average, over a calendar year, of the total value in one day of all e‑money that is issued in Singapore, and is stored in any payment account issued by the licensee to any person whom the licensee has not determined, according to such criteria as the Authority may specify by notice in writing, to be resident outside Singapore; or

 

(c) both of the following apply:

(i) the licensee carries on a business of providing an e‑money issuance service;

(ii) the average, over a calendar year, of the total value in one day of all specified e‑money that is issued by the licensee exceeds $5 million (or its equivalent in a foreign currency).

 

In summary, the thresholds are:

  • S$3 million monthly transactions for any payment service (other than e-money account issuance and money-changing services).
  • S$6 million monthly transactions for two or more payment services (other than e-money account issuance and money-changing services).
  • S$5 million of daily outstanding e-money

 

The eligibility criteria are as follows (i.e., who can apply for a Standard or Major Payment Institution Licence)

  • The applicant must be a Singapore-incorporated company or a foreign corporation registered in Singapore.
  • The applicant must have a permanent place of business or registered office.
  • The applicant must have a minimum base capital of S$250,000.
  • The applicant’s board of directors should have either:
    • at least 1 executive director who is a Singapore Citizen or Singapore Permanent Resident
    • at least 1 non-executive director who is a Singapore Citizen or Singapore Permanent Resident and at least 1 executive director who is a Singapore Employment Pass Holder.

 

The licence is issued by the MAS and the MAS takes into consideration certain admission criteria to determine if an applicant should be issued a licence. The MAS considers each application on its own merits. It may take into account other factors on a case-by-case basis. The criteria are as follows:

  • Fitness and propriety of the controllers and directors.
  • Governance structure.
  • Qualifications and experience, particularly in operating a payment services business and compliance with regulatory requirements.
  • Financial condition and track record.
  • Business plan and model, including operational readiness.
  • Ability to comply with obligations under the PS Act, including compliance, safeguarding, technology risk management and audit arrangements.
  • Regulatory status in other jurisdictions, where applicable.
  • For applicants with a holding company, commitment to operations in Singapore.
  • Whether the public interest will be served by granting a licence.

 

Upon successful application, the licence holder will be listed in MAS’ Financial Institutions Directory.

 

The licence issued is valid until either of the following occurs:

  • The licence is revoked by MAS.
  • The licence lapses in accordance with section 11(1) of the PS Act and regulation 10 of the Payment Services Regulations.
  • The licensee surrenders its licence.

 

Once a licence holder ceases to have a valid licence, it will be removed from the MAS Financial Institutions Directory.