Reply to Parliamentary Question on online banking licences for internet companies
NOTICE PAPER 521 OF 2017
FOR THE SITTING ON 7 FEBRUARY 2017
QUESTION NO 952 FOR ORAL ANSWER
Date: For Parliament Sitting on 7 February 2017
Name and Constituency of Member of Parliament
Ms Sun Xueling, MP, Pasir Ris-Punggol GRC
To ask the Prime Minister (a) whether there are plans to offer online banking licences to internet companies focused on providing solutions for mobile payments; and (b) what will be the pre-requisites in terms of infrastructure and company capabilities for such licences.
Answer by Mr Ong Ye Kung, Minister for Education (Higher Education & Skills) and Second Minister for Defence, on behalf of Mr Tharman Shanmugaratnam, Deputy Prime Minister and Minister in charge of MAS:
1 MAS’ existing bank licensing framework can accommodate internet-only banks to operate in Singapore. As the risks posed by internet-only banks are not fundamentally different from those posed by conventional banks, they will operate within the same licensing and regulatory regime as conventional banks.
2 But most Internet companies will not require a banking license unless they intend to take deposits and grant loans. If they are offering mainly payment solutions, depending on the specific type of payment service they provide, they may be subject to a narrow set of regulatory requirements pertinent to that payment service.
3 For example, PayPal, an online payment platform that facilitates e-commerce transactions, is only required to comply with requirements applicable to stored value facilities under the Payment Systems (Oversight) Act. Likewise, Singtel’s mRemit1, a remittance service on mobile phones, is licenced under the Money-Changing and Remittance Businesses Act.
4 More non-bank FinTech payment companies are coming onto the scene, offering a variety of payment services. MAS encourages this development as it potentially offers consumers more choice and convenience, and further develop our financial industry. To better calibrate its regulatory requirements to the various modes of innovative payment services, MAS has put out for consultation a new, streamlined activity-based regulatory framework for payments. The aim is to promote innovation, ensure security, and foster consumer confidence. MAS is currently reviewing public feedback on the proposed payments regulatory framework.
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1 Singtel’s wholly owned subsidiary, SingCash, holds a remittance licence.