Question:
To ask the Deputy Prime Minister whether and when the Government will introduce legislation to facilitate (i) electronic presentation truncation and clearing of cheques and other electronic payment orders; (ii) issue of electronic legal tender; (iii) issue of electronic purses, stored value and payment cards by financially sound institutions other than banks; (iv) creation of electronic payment clearing and settlement centres by institutions other than local banks; and (v) protection of personal financial information gathered by merchants and other participants of electronic commerce.
Answer:
(i) The Monetary Authority of Singapore (MAS) has encouraged the financial industry to embark on a number of projects to improve the efficiency of the current payments infrastructure, including the cheque truncation and other electronic payment systems. The MAS is also considering appropriate legislative changes to facilitate the implementation of these new systems and processes.
(ii) Today only currency notes are legal tender. As cashless forms of payment become more widespread, the Board of Commissioners of Currency, Singapore (BCCS) is looking into the need to legislate for electronic payments to also be accepted as legal tender. Merchants covered by the legislation must then accept electronic payment if tendered. Electronic tender will reduce the cost of handling physical cash, improve the efficiency of business transactions, and further enhance the cashless business environment for Singapore. However, widespread infrastructure to support such an environment will be necessary, and the public must be adequately prepared for the transition. BCCS is actively studying this.
(iii) Under the current regulatory framework, only licensed banks, with the approval of MAS, can issue multi-purpose stored value cards (MPSVCs). It is also common in major jurisdictions for the issuance of MPSVC to be restricted to deposit-taking institutions like banks. Issuing MPSVCs is a form of deposit taking, so MAS wants to be certain that card holders have some protection should the issuer run into difficulty. Banks are subject to MAS supervision and to reserve and liquidity requirements on the proceeds collected from MPSVCs, but other commercial companies have no similar requirements. We will continue to review this, weighing the balance between innovation and proper protection of proceeds.
(iv) The operation of clearing and settlement systems is not restricted to the local banks. For example, Citibank is the settlement bank for the USD cheque clearing system while Banking Computer Services Pte Ltd is the operator of the Automated Clearing House.
(v) The Ministry of Communications and Information Technology is spearheading an inter-agency task force to study general privacy issues, taking into account international developments. The study will focus on the impact of e-commerce and Internet on data protection and privacy and will cover, among other things, financial information collected from e-commerce websites.