Date: For Parliament Sitting on 15 October 2024
Name and Constituency of Member of Parliament
Mr Chua Kheng Wee Louis, MP, Sengkang GRC
Question:
To ask the Prime Minister and Minister for Finance (a) with regard to funds collected by payment service providers and e-commerce platforms, whether current legislation restricts the settlement period to vendors and customers; and (b) whether current legislation requires customer funds to be separately managed for platforms with stored values.
Answer by Mr Gan Kim Yong, Deputy Prime Minister and Minister for Trade and Industry, and Chairman of MAS:
1. The operation of an e-commerce platform is not regulated by MAS. However, an e-commerce platform that provides payment services covered under the Payment Services Act 2019 (PS Act) must be licensed by MAS. There are requirements under the PS Act on the transmission and safeguarding of monies, which would then apply to licensed payment services activities.
2. On transmission, licensed payment service providers must send monies from its customers to its intended beneficiaries within (a) three business days for domestic money transfers; (b) seven business days for cross-border money transfers; or (c) in the case of customers who are merchants, any other period as may be agreed in writing between the payment service provider and its customers. For customers who are merchants, MAS took into account industry feedback and practices, and allowed parties the flexibility to mutually agree in writing to a different settlement period.
3. Payment service providers that are licensed as major payment institutionsAn entity must be licensed as a major payment institution if
(a) If it carries on business in one or more of the following services—account issuance service, domestic money transfer service, cross-border money transfer service, merchant acquisition service, digital payment token service, and the total value of all payment transactions processed in a month (when averaged over a calendar year) exceeds (i) $3 million for any one of the payment services or (ii) $6 million for two or more of the payment services.
(b) If it carries on business of providing an e-money account issuance service or e-money issuance service, and the total value of all e-money issued in one day or stored in any payment account (when averaged over a calendar year) exceeds $5 million. are also required to safeguard monies received. They must do so by depositing the relevant money in a trust account with a safeguarding institution or bank, or obtaining an undertaking or guarantee from the safeguarding institution or bank. The payment service provider must safeguard the monies by the end of the next business day after it receives the monies from a customer or in the case of e-money, from the time the e-money is received or issued to the customer.
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