The Monetary Authority of Singapore (MAS), the country's central bank and financial regulatory authority, has finalized new regulatory framework for payment services in the island country.
Image: MAS to bring new framework for payment services in Singapore. Photo: Courtesy of rawpixel/Unsplash
MAS stated that the new Payment Services Bill, which has been submitted in the Parliament, will provide a more conducive environment for innovation in payment services, while mitigating the risks in the payments value chain.
The bill is expected to streamline the regulation of payment services within a single activity-based legislation. It includes two parallel regulatory frameworks: a designation regime that enables MAS to regulate systemically important payment systems for financial stability and efficiency reasons; and a licensing regime that focuses on retail payment services offered to customers and merchants.
According to MAS, activity-based licensing framework for retail payment services can facilitate innovation and reduce risks. The licence regime has been broadened to include a wide range of payment activities, such as domestic money transfers, merchant acquisition and the purchase and sale of digital payment tokens.
At any point in time, a payment service provider would only need to hold one licence, but of a class that corresponds to the risk posed by the scale of payment services provided.
Risk mitigation measures will then be customized to the specific payment services that a licensee provides to better safeguard customer and merchant monies.
MAS managing director Ravi Menon said: “The Payment Services Bill will enhance the regulatory framework for payment services in Singapore, strengthen consumer protection and engender confidence in the use of e-payments.
“The Bill also illustrates our shift towards regulation that is modular, activity-based and facilitative of growth and development in the Singapore payments landscape.”
Recently, the Singapore’s regulatory authority and the Central Bank of Bahrain (CBB) have signed a memorandum of understanding (MOU) to develop innovation in financial services between the two countries.
The MOU will help in sharing information on emerging fintech trends and developments and can facilitate to co-operate on innovation projects in the two countries. It has also set in place a common framework to help fintech companies prepare for regulatory requirements in the countries.