How to Become a Licensed Payment Service Provider in Singapore
To run as a payment service provider in Singapore, a business needs a license from the Monetary Authority of Singapore. The payment services act has strict rules for companies that move money, give out e-wallets, or work with digital payment tokens. Knowing these rules helps businesses stay out of trouble and makes customers trust them.
| Activity Type | Description of services | Status under PSA |
|---|---|---|
| Account issuance services | Giving, keeping, or running a payment account in Singapore. | Newly regulated activity. |
| Domestic money transfer services | Payment transactions done through a payment account in Singapore. | Newly regulated activity. |
| Cross-border money transfer | Services that help send or get money from other countries. | Now regulated under PSA. |
| Merchant acquisition services | Giving point-of-sale machines or online payment tools to merchants. | Newly regulated activity. |
| E-money issuance | Giving electronic money for later payments and transfers. | Now regulated under PSA. |
| Digital payment token services | Working with or trading digital payment tokens. | Newly regulated activity. |
| Money-changing service | Buying or selling foreign money notes in Singapore. | Now regulated under PSA. |
Every business should check if its services are in these groups before asking for a license.
Key Takeaways
- To run as a payment service provider in Singapore, businesses need a license from the Monetary Authority of Singapore (MAS). Knowing the licensing rules is important for following the law and gaining customer trust.
- There are three main types of licenses. These are Money-Changing License, Standard Payment Institution License, and Major Payment Institution License. Pick the right license for your business size and services.
- Make a clear business plan and collect needed documents before you apply for a license. You must show proof of financial strength and follow anti-money laundering rules.
- You must report often and follow MAS rules to keep your license. Providers need to keep good records and tell MAS about any suspicious actions.
- Ask experts for help if you need it. The licensing process can be hard, and professionals can help you follow the rules and make applying easier.
Regulated Payment Services
Types of Services
The Monetary Authority of Singapore watches over many payment services. These services help people and companies move money in a safe way. Each service has its own job in the money system. The table below lists the main types and what they do:
| Type of Payment Services | Brief Description |
|---|---|
| Account issuance service | Giving out payment accounts or helping with account use. |
| Domestic money transfer service | Helping people send money inside Singapore. |
| Cross-border money transfer | Sending or getting money between Singapore and other countries. |
| Merchant acquisition service | Helping stores take and handle payments. |
| E-money issuance service | Giving out e-money for paying or sending money. |
| Digital payment token service | Buying, selling, or helping with digital payment tokens. |
| Money-changing service | Buying or selling money from other countries. |
The authority also knows about different groups of institutions. These are designated payment system operators, settlement institutions, standard payment institutions, major payment institutions, and money-changing licensees. Each group must follow special rules in Singapore.
Licensing Triggers
Some business actions in Singapore need a payment services licence. These actions can make a business need a licence:
- Buying or selling digital payment tokens for money or other tokens.
- Helping people swap digital payment tokens.
- Taking digital payment tokens to send to another account.
- Setting up transfers of digital payment tokens between accounts.
- Making deals for buying or selling digital payment tokens.
- Keeping digital payment tokens when the provider is in charge.
- Doing what customers ask with digital payment tokens when the provider is in control.
Note: Any business that wants to give these services in Singapore must check if what they do needs a licence. The rules help keep users safe and make the payment system strong.
Payment Services Licence in Singapore
Licence Types
Singapore has three main licence types for payment service providers. Each licence is made for different business needs and risk levels. The licence types are:
- Money-Changing Licence: This licence lets a business buy or sell foreign money notes in Singapore. It is good for companies that only want to do money-changing.
- Standard Payment Institution Licence: This licence is for businesses with smaller payment amounts. It covers most payment services like account issuance, local and overseas transfers, merchant acquisition, e-money issuance, and digital payment token services. Companies with this licence must keep to certain transaction and e-money float limits.
- Major Payment Institution Licence: This licence is for businesses that handle large payment amounts or hold a lot of e-money. It lets companies offer the same services as the standard licence but without the same limits. These companies must meet higher money and rule-following standards.
Tip: Companies should look at their business plans and future goals before picking a licence. The right licence helps a business run well and follow all the rules in Singapore.
Choosing a Licence
Picking the right payment services licence in Singapore takes careful thought. Businesses need to check their services, payment sizes, and future plans. The Monetary Authority of Singapore looks at many things before giving a licence. These things help make sure only good and able companies work in the market.
| Factor | Description |
|---|---|
| Fitness and propriety of controllers | Checks if key leaders are honest and right for the job. |
| Governance structure | Looks at how the company makes choices and handles risks. |
| Qualifications and experience | Checks if the team knows about payment services and rules. |
| Financial condition and track record | Looks at the company’s money health and past results. |
| Business plan and model | Checks if the company has a good plan and is ready to work. |
| Compliance capabilities | Looks at how well the company can follow the Payment Services Act and handle risks. |
| Regulatory status | Checks the company’s standing in other countries. |
| Commitment to Singapore | Looks at how much the company wants to work in Singapore. |
| Public interest | Checks how the licence will help the community. |
A business that knows these things can get ready for the licence process. This helps them get the right licence and build trust with customers in Singapore.
Payment Service Provider Requirements
Eligibility Criteria
To be a payment service provider in Singapore, you must meet strict rules. The Monetary Authority of Singapore, or MAS, sets these rules. Only qualified people and companies can offer payment services. These rules help keep users safe and protect the money system.
| Criteria | Description |
|---|---|
| Singapore Incorporation | The applicant must be a Singapore-incorporated company or a Singapore branch of a foreign corporation. |
| Place of Business | A permanent place of business or registered office must be established to securely hold records. |
| Corporate Governance | At least one executive director must be a Singapore citizen or permanent resident, or an employment pass holder with another director who is a citizen or resident. |
Applicants need to show they have experience in payment services. MAS checks if the team has the right skills and background. The authority wants to see if the business can handle risks and follow the rules. Meeting these rules is the first step to get a licence.
Note: MAS looks at each application closely. They want to see a strong business plan and a real interest in Singapore’s payment sector.
Governance for Sole Proprietors
Sole proprietors who want a payment services licence must follow special rules. MAS has extra requirements for these people to make sure they can run payment services well.
| Requirement | Description |
|---|---|
| Citizenship | The applicant must be a Singapore citizen. |
| Experience | Must have a minimum of one year’s relevant full-time working or business experience. |
A sole proprietor must show they know about the payment industry. MAS checks if the person has enough experience to run the business. The authority also looks at the person’s background to make sure they can follow the rules.
Tip: Sole proprietors should keep proof of their work experience. Be ready to show this during the application process.
Thresholds
MAS sets money and business limits for payment service providers. These limits depend on the licence type. The Payment Services Act explains how much money each licence needs.
| License Type | Minimum Capital Requirement |
|---|---|
| Standard Payment Institution License | S$100,000 |
| Major Payment Institution License | S$250,000 |
A payment service provider must have enough money to cover risks. For a standard payment institution license, you need at least S$100,000. For a major payment institution license, you need at least S$250,000. MAS checks if the business can meet these money rules before giving a licence.
Other business rules include:
- The applicant must be a Singapore-incorporated company or a foreign company registered in Singapore.
- The applicant must have a permanent place of business or office.
- The applicant must have at least S$250,000 base capital for a major payment institution license.
Payment service providers must also follow ongoing rules. MAS wants businesses to keep good records, report often, and follow anti-money laundering rules. These rules help keep Singapore’s payment system safe and trusted.
Alert: If you do not meet these limits or rules, your licence can be suspended or cancelled.
Application Process for Licence
The steps to get a payment services licence in Singapore are clear. Payment service providers must get ready and follow all the rules. This helps MAS see if a business can give safe payment services.
Steps to Apply
A payment service provider needs to do these things to apply:
- Prepare a Business Plan
The business writes a plan that explains its services. It says who the customers are and how money moves. The plan also shows how the company will follow rules and keep users safe. - Gather Required Documents
The company collects papers that prove it meets the licence rules. These papers show the business is ready to work in Singapore. - Appoint an External Auditor
The business picks an external auditor. The auditor checks the company’s anti-money laundering and consumer protection steps. This is needed for new applications and for changes with digital payment token services. - Obtain a Legal Opinion
The company gets a legal opinion from a law firm. This opinion says if the tokens are digital payment tokens or capital markets products. The legal opinion is very important for the application. - Submit the Application to MAS
The business sends the application and all papers to MAS. MAS checks if the company follows all the rules. - Pay the Application Fees
The company pays the fees set by MAS. The fee amount depends on the licence and services.
Tip: Companies should check all papers before sending them to MAS. If something is missing or wrong, the process will take longer.
Required Documents
MAS asks for many papers to see if a business meets the main rules. The table below shows what is needed for the application:
| Category | Requirements |
|---|---|
| Corporate and Governance | – The business must be set up in Singapore |
| – At least one executive director must live in Singapore | |
| – Directors, shareholders, and officers must pass a fit and proper test | |
| – The company must show who owns it and how shares are held | |
| Business and Compliance | – At least S$100,000 for a standard payment institution license and S$250,000 for a major payment institution license |
| – A full business plan | |
| – Anti Money Laundering (AML) /CFT rules that match MAS guidelines | |
| – Technology risk management plan, especially for digital payment tokens or e-wallets | |
| – Cyber safety and plans for handling problems | |
| – Risk management plan for fraud, cybersecurity, and digital payment tokens |
These papers help MAS see if the business meets the rules. The company must also show it has good technology risk controls and follows all the rules.
Legal Opinion
A legal opinion is a report from a law firm. MAS needs this to check if the tokens are digital payment tokens or capital markets products. The legal opinion must list all tokens and explain what they are. This helps MAS make sure the business follows the Payment Services Act (PSA) and other rules.
| Requirement | Description |
|---|---|
| Legal Opinion | Needed to check if tokens are digital payment tokens or capital markets products. |
| Compliance | Needed to follow MAS rules. |
| Assessment Requirement | Applicants must list all tokens and give a legal opinion about them. |
Note: The legal opinion is needed for new applications and for changes with digital payment token services.
MAS Review
MAS checks each application in different steps. The review looks at the business plan, papers, legal opinion, and risk controls. The table below shows how long each step usually takes:
| Stage | Duration |
|---|---|
| Company registration | About 1 week |
| Corporate bank account opening | About 4 weeks |
| Employment Pass application | About 6 weeks |
| MAS application review | 6 to 8 months |
MAS checks if the company can give safe payment services in Singapore. MAS also checks if the business meets all the licence rules.
Block Quote:
MAS says that not meeting AML/CFT rules and weak technology risk controls are common reasons for licence rejection. It is important for applicants to follow the rules and have a strong technology risk plan before applying.
The process can take many months. Payment service providers should plan ahead and have all papers ready. Meeting the main rules and following the steps helps the business get a licence faster.
Ongoing Compliance Requirements
Reporting Duties
A payment service provider in Singapore has strict reporting rules. MAS wants providers to send regular reports about what they do. These reports help MAS watch the payment system and keep it safe. Providers must send updates often and tell MAS about any changes. They also need to share information about how they run their business. The table below shows the main things providers must report:
| Requirement | Description |
|---|---|
| Periodic returns | Send regular reports about payment service activities. |
| Business conduct | Keep records of transactions and protect customer money. |
| Disclosures and communications | Give clear information about the license and any changes to customers. |
| Cyber hygiene | Follow rules to keep customer data and systems safe. |
Note: If providers do not follow these rules, they can get big fines or lose their license.
AML/CFT Obligations
Singapore has strong rules to stop money laundering and terrorism funding. Every payment service provider must follow these rules. The PSA and MAS notices list what providers must do for AML/CFT. Providers must check who their customers are and keep good records. They also need to report anything that looks suspicious. The table below explains the main AML/CFT rules:
| Obligation Type | Description |
|---|---|
| Risk assessment and risk mitigation | Check for risks of money laundering and terrorism funding, and lower those risks. |
| Customer due diligence | Find out who all customers and owners are, and check their identity. |
| Record keeping | Keep records of all transactions and customer details. |
| Suspicious transaction reporting | Tell MAS if something looks suspicious. |
| Internal policies and training | Make strong rules and teach staff about AML/CFT. |
Tip: Good compliance helps providers follow these rules and avoid trouble with MAS.
Audit and Renewal
MAS says every payment service provider must have an outside auditor. The auditor must have the right skills and be approved by the Accountants Act 2004. The auditor checks the provider’s accounts and sends a report to MAS every year. The table below shows what is needed for the audit:
| Criteria | Minimum Requirements |
|---|---|
| Qualifications | Auditor must be approved under the Accountants Act 2004. |
| Experience | Auditor must have done at least one MAS audit or review before. |
| Independence | Auditor must be independent and not have any conflicts of interest. |
Providers must renew their license on time and keep following all the rules. MAS can take action if a provider does not meet the rules. This can mean fines, losing the license, or even having it cancelled. Breaking Notice PSN01 under the MAS Act can mean a fine up to $1,000,000 for each offence.
Alert: Providers should always check their compliance and audit steps to keep their license and protect their business.
To get a payment service provider license in Singapore, you must do a few things. First, pick the license that matches your business work. Next, make sure you meet the main rules from MAS. These rules include how your company is run and how much money you need. Then, finish the application steps. This process can take many months.
Some people have trouble with paperwork and learning the rules. Experts in Singapore can help you follow the rules and fill out forms.
Always watch for new rules and updates so your business follows the law.
FAQ
What is the role of the Monetary Authority of Singapore in licensing?
The Monetary Authority of Singapore looks at every application. They check if each provider follows the rules. They also work to keep users safe and protect the payment system.
Who can apply for a payment service provider license in Singapore?
A company or a sole proprietor can ask for a license. The business must have a real office in Singapore. The person applying should have experience with payment services.
What is e-money and why is it regulated?
E-money is money you use online for payments. It helps people pay or send money on the internet. The government makes rules for e-money to stop fraud and keep users safe.
How long does the licensing process usually take?
The process can take a few months to finish. MAS checks the application, looks at the papers, and reviews risk controls. Providers should get all their documents ready before they apply.
What ongoing duties must payment service providers follow?
Providers must report what they do and follow anti-money laundering rules. They also need to renew their license, keep records, and protect customer data.
