All You Need to Know About Singapore Payment Services Act

All You Need to Know About Singapore Payment Services Act

3 min Read

Singapore is known as one of the most innovative countries globally. One of the country’s innovation indicators is its forward-looking regulatory framework, especially in terms of financial services. The government has bolstered up innovations in the country’s financial sector by introducing the Payment Services Act to regulate payment systems and payment service providers. Some prominent payment service providers in Singapore that already have licenses regulated under the Act include Gojek, Grab, and Coinhako.

Businesses engaged in the financial sector in Singapore must be familiar with all regulations governing payment services. They also must know which payment service licenses they need to apply for to operate their businesses. On that account, this article has summarized all the essential elements relating to the Act. 

What is the Payment Services Act?

The Payment Services (PS) Act is a flexible and forward-looking framework that regulates Singapore’s payment systems and payment service providers. It provides regulatory certainty and consumer protection while driving innovation and growth in payment services and FinTech.

Previously, the regulations of payment services was governed by the Payment Systems (Oversight) Act (“the PS(O)A”) and the Money-changing and Remittance Businesses Act (“the MCRBA”). The regulations from these two previous Acts were modified and merged into the PS Act.

The PS Act has two main objectives:

  1. to protect the financial stability of Singapore and ensure fair competition between market participants;
  2. for the Monetary Authority of Singapore (MAS) to establish a licensing regime and provide direct oversight of payment systems and payment service providers to ensure that they comply with the Anti Money Laundering and Countering the Financing of Terrorism (“the AML and CFT”) regulations. 

Regulatory Schemes in the Payment Services Act

There are two regulatory schemes involved in the PS Act:

1) Designation Regime

Under the terms of the PS Act, certain payment systems may be “designated for closer supervision” if they play a significant role in the security and efficiency of Singapore’s financial system.

There are three designation categories:

  • Systemically Important Payment Systems (SIPS): Any system whose disruption could cause a ripple effect on other participants or a systemic disruption in Singapore’s financial system, e.g., MAS Electronic Payment System (MEPS+).
  • System-Wide Important Payment Systems (SWIPS): Any system whose disruption could affect public confidence in Singapore’s payment system or financial system. Some examples of SWIPS include Fast and Secure Transfers (FAST), the Singapore Dollar Cheque Clearing System, the US Dollar Cheque Clearing System, the Inter-bank GIRO (IBG) System, and the Network for Electronic Transfers.
  • Any other designation which authorities deem is in the public interest to designate as such.

2) Licensing Regime

Payment service providers are required to obtain a license if they provide certain payment services under the PS Act, such as the following:

  • Account issuance services These include any services that issue payment accounts to customers or involve operations required by payment accounts, such as non-bank credit cards and e-wallets.
  • Money transfer services These are services that facilitate the transfer of domestic funds in Singapore, such as online payment gateways and physical payment kiosks.
  • International money transfer services Services that perform cross-border fund transfers in and out of Singapore.
  • Merchant acquisition services Service providers that process payments on behalf of merchants, such as payment gateways or point-of-sale card terminals.
  • Money changing services Services that facilitate the buying and selling of foreign currency in Singapore, including online payment service providers and any company that benefits from exchanging physical currency.

Furthermore, the PS Act has an expanded scope to cover services related to virtual assets and currencies. Thus, PSA also applies to:

  • Electronic money issuance services These include services that facilitate the issuance of electronic money that customers can store in electronic wallets, transfer to others, and use to pay for goods and services.
  • Digital payment token services Exchange service providers for digital payment tokens (DPT) or platforms for buying and selling DPT, also known as cryptocurrencies, in Singapore.

However, the PS Act does not mandate a license for:

  • Payment instrument aggregators — service providers that enable merchants to process mobile or e-commerce payments. They let businesses accept credit and debit card payments without creating a merchant account through a bank. These providers do not process funds; they only store and pass payment information;
  • Data communication platforms that transmit financial information;
  • Market participants who provide services to payment service providers and other financial institutions.

You may be interested in this relevant article;

A Guide to Cryptocurrency Exchange Regulations in Singapore

Relevant Licenses for Payment Services Providers

If your company performs one or more of the activities above, you must choose between the following three license classes.

Money-Changing License

Under the Money-Changing License, you may only conduct money-changing services, namely the service of buying or selling foreign currency notes. For more details, please refer to this page.

Standard Payment Institution License

Standard payment licensed institutions may provide any combination of the seven specified payment services as long as the volume is below the Act’s specified threshold. In short, these thresholds are:

  • S$3 million in monthly transactions for any payment services (other than e-money account issuance and money exchange services); or
  • S$6 million in monthly transactions for two or more payment services (other than e-money account issuance and money exchange services); or
  • S$5 million daily electronic money in circulation.

Note that entities that provide payment services beyond the specified threshold must obtain a Major Payment Institution License. For more information, click here.

Major Payment Institution License

Under the Major Payment Institution License, you can provide any combination of the seven defined payment services without being subject to any constraints. Among all payment service-related licenses, this is the most comprehensive one. Click here to see the application requirements. 

Key Risks in Most Payment Services

The regulations set out in the PS Act are designed to mitigate four main risks common to most payment services. They are as follows:

User Protection

The PS Act requires major payment institutions to protect customer funds from loss due to the institutions’ bankruptcy by using one of the following means:

  • An undertaking or guarantee by a bank or other financial institution determined in Singapore to be fully liable to the customer for the money;
  • Deposits in a trust account; or
  • Protect in other ways as the MAS may decide.


Payment services may be used for money laundering or terrorism financing purposes. Accordingly, MAS may impose the appropriate AML or CFT requirements on relevant licensees through Notices issued under the MAS Act. However, low-risk transactions are exempted from AML and CFT requirements.


The PS Act gives MAS formal powers to ensure the interoperability of payment solutions in the interests of consumers and market development. Moreover, there are plans to adopt a common standard to make widely used payment acceptance methods interoperable.

Technology Risk Management

The PS Act also empowers MAS to enforce technology risk management requirements on all licensees, including cybersecurity risk management requirements. Therefore, payment service providers must ensure that there is adequate risk management and implementation of mitigation strategies. In addition, special attention should be paid to areas such as user authentication, data loss protection, and cyber-attack prevention and detection.


The Payment Services Act provides a revolutionary framework for regulating payment systems and payment service providers in Singapore. This is good news for entrepreneurs looking to establish FinTech companies since the Act aims to strengthen consumer protection and promote confidence in the use of e-payments.

If you are ready, we can assist you in incorporating your financial services business in Singapore and obtaining the relevant payment services license for your new company. We can also help you with other tasks related to setting up and operating your business in Singapore. Contact us for more information or book a meeting for immediate assistance.

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