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MAS proposes single license framework for payment service providers

The Monetary Authority of Singapore (MAS) has released a consultation paper on proposed changes to the payments regulatory framework and establishment of a National Payments Council, taking into account the ongoing innovation in the fintech space.

Singapore’s payment regulations are currently classified into two categories of legislation:

  • The Payment Systems (Oversight) Act (PS(O)A) which governs stored value, and,
     
  • The Money-changing and Remittance Businesses Act (MCRBA) which governs remittances

However, with the advent of fintech and technological advances, the MAS says that the lines between payments and remittance are blurring; new payment providers are emerging and some do not fit into these categories. Addressing these issues the central banking authority has proposed a framework that aims to strengthen standards of consumer protection, anti-money laundering, and cyber security related to payment activities, while facilitating innovation and system interoperability.   

“MAS proposes to bring these regulations under a single framework that will provide for the licensing, regulation and supervision of all payments services, including stored value facility holders, remittance companies, and virtual currency intermediaries”, it said. “Regulation will be applied on an activity basis, and entities will only be required to apply for a single licence to undertake several payment activities.”

In addition, the MAS has proposed to establish a National Payments Council to coordinate key initiatives such as promoting interoperability and adopting common standards. The payments council will draw its members from among users and providers of payment solutions, and foster collaboration among stakeholders to promote and drive industry payment solutions. 

According to the official release, the MAS said that it now seeks industry feedback on the proposed scope of the payments council, its composition, ownership and powers. The public consultation, which will last from 25 August 2016 to 31 October 2016, is the first in a series of consultations on the proposed regulatory framework and governance model for Singapore’s payments landscape.

“Payments is one of the key components of FinTech and serves as a foundation for our vision of a Smart Financial Centre. This public consultation is an important step for MAS and the payments industry to co-create the future of Singapore’s payments landscape; one where payments are swift, simple, and secure, supported by streamlined regulation and inclusive governance”, MAS Deputy Managing Director, Jacqueline Loh said.

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