• The services have a clear payments nexus
• The service providers process funds or acquire transactions for merchants,
• The service providers contract or deal with the consumer or the merchant.

• any Payment service that is provided by any person in respect only of any limited purpose e-money
• any Service of dealing in, or facilitating the exchange of, any limited purpose DPTs, and
• any Payment service solely incidental to or necessary for regulated activities carried out by a regulated financial services company.

• Account issuance service.
• Domestic money transfer service.
• Cross-border money transfer service.
• Merchant acquisition service.
• Digital payment token service.
• E-money issuance.
• Money-changing service.

Find out about what each of these payment services entail.

MAS has put in place a robust licensing process to ensure that only firms that are fit and proper and who are able to put in place the proper safeguards and controls are allowed to operate in Singapore.

Refer to MAS' Guidelines on Fit and Proper Criteria for more information.

For licensed entities, the existing tools that MAS uses to regulate other financial institutions, such as on-site inspections and off-site reviews, continue to be used. As in other sectors, a risk-based supervision approach is applied to allocate our resources according to the risks presented.

MAS will be increasing the amount of resources dedicated to supervising this sector as a whole, and will leverage supervisory technology solutions where relevant to enhance its surveillance capabilities.

MAS does not intend for loyalty programmes that are common in the retail space to be regulated as payment services. Such programs are designed to promote the purchase of goods or use of services provided by the loyalty points issuer or any merchant specified by the loyalty points issuer.

Due to their limited use and customer reach, such programmes do not pose the same level of risks that payment services pose. Loyalty points may be “limited purpose e-money” or “limited purpose digital payment token” within the meaning of Part 3 of the PS Act .

Any payment service mentioned in Part 1 of the First Schedule to the PS Act, that is provided by any person in respect only of any limited purpose e-money, is excluded from regulation. Likewise, any service of dealing in, or facilitating the exchange of, any limited purpose (DPT), is excluded from regulation.

In assessing whether loyalty points are “limited purpose e-money” or “limited purpose digital payment token”, MAS will likely consider the following factors among others:

• Whether the programme under which such points are issued is marketed to customers as a loyalty program or as a payment service; and 
• Whether any part of the programme conflicts with its stated objective of promoting the purchase of goods or use of services provided by the loyalty points issuer or any merchant specified by the loyalty points issuer. 

MAS has observed that there are businesses offering e-wallet top up services. This is usually where the service provider (Business X) accepts money from a customer for the purpose of sending the money to an e-wallet operator, so that the e-wallet operator can top up the customer’s payment account.

Business X does not provide an account issuance service because it does not operate the payment account and top up the payment account. Instead, it only hands over the money to the e-wallet operator.

Business X would however be providing an account issuance service in a situation where Business X (rather than the e-wallet operator) operates the payment account and tops up the payment account. In that situation, Business X will need to hold a licence to provide an account issuance service, unless it is exempted.

E-money vs DPT:
A payment account may take the form of an e-wallet which is funded with e-money. This e-money is denominated in or pegged by the issuer to a fiat currency. This is an important distinction from DPTs.

Where the monetary value of the electronically stored amount in fiat currency cannot be determined without referring to some form of market mechanism, for example through the trading of the electronically stored monetary value on an exchange, such electronically stored amount is not e-money but may be a DPT.

E-money vs Deposits:
E-money is money paid in advance under a contract for the provision of a service. E-money are not bank deposits and therefore not protected by deposit insurance. That said, MPIs are required to safeguard their e-money float. 

MAS has also issued a consultation paper on the scope of e-money and DPT. You may wish to refer to part 3 of Consultation on the Payment Services Act 2019 - Scope of E-money and Digital Payment Tokens for more information.

Often, the entity operating the e-wallet also issues the e-money. However, there is also a possibility that the e-wallet is provided by an entity that is separate from the issuer of the e-money.

The service provider that provides and maintains this e-wallet performs an account issuance service, which poses all four key risks and concerns that need to be addressed:

• Money laundering/terrorism financing (MT/FT) risks
• Technology risk
• User protection; and
• Interoperability concerns.

There are 3 types of licences that payment service providers can apply to provide payment services regulated under the Payment Services Act (PS Act):

• Major payment institution licence.
• Standard payment institution licence.
• Money-changing licence.

Find out more about each licence's fees, and eligibility and assessment criteria. 

Foreign companies can hold a licence under the Payment Services Act (PS Act) and are governed under the same regulatory framework as local companies.

• An applicant for a licence (other than a money-changing licence) must be a company or a corporation formed or incorporated outside Singapore.
• The applicant must also have an executive director which meets certain Singapore residency requirements.
• A licensee must not carry on business of providing any type of payment service unless the licensee has a permanent place of business or registered office in Singapore.
• A licensee must appoint at least one person to be present, on such days and at such hours as MAS may specify by notice in writing, at the licensee’s permanent place of business or registered office to address queries or complaints from any payment service user or customer of the licensee.
• The licensee must also keep, or cause to be kept, at the licensee’s permanent place of business or registered office, books of all the licensee’s transactions in relation to any payment service provided by the licensee.

Find out the details on the eligibility and assessment criteria for each type of licence or refer to the Guidelines on Licensing for Payment Service Providers for more information.

Licencees under the PS Act will be listed on the MAS financial institution directory.

The public is encouraged to deal with financial institutions that are listed on the directory.