The Monetary Authority of Singapore (MAS) today launched a second consultation on its proposed payments regulatory framework, known as the Payment Services Bill (the “Bill”).
The Bill will streamline the regulation of payment services under a single legislation, expand the scope of regulated payment activities to include virtual currency services and other innovations, and calibrate regulation according to the risks posed by these activities.
Last year, MAS had sought public feedback on the scope of the proposed payments regulatory framework. MAS has considered and responded to the feedback received.
When the new Bill is enacted, payment firms will only need to hold one licence under a single regulatory framework to conduct any or all of the specified payment activities. Only payment activities that face customers or merchants, process funds or acquire transactions, and pose relevant regulatory concerns will need to be licensed.
The new framework will expand the scope of regulation to include domestic money transfers (e.g. transferring money through payment kiosks), merchant acquisition (e.g. acquiring transactions through a point-of-sale terminal or online payment gateway), and the purchase and sale of virtual currencies.
To help ensure that the expanded scope of regulation is not onerous, the Bill will differentiate regulatory requirements according to the risks that specific payment activities pose rather than apply a uniform set of regulations on all payment service providers.
The Bill will empower MAS to regulate payment services for money-laundering and terrorism financing risks, strengthen safeguards for funds belonging to consumers and merchants, set standards on technology risk management and enhance interoperability of payment solutions across a wider range of payment activities.
MAS Managing Director, Mr Ravi Menon said, “We want to put in place a forward-looking regulatory regime to encourage wider adoption of secure e-payment solutions. The novel, activity-based licensing framework aims to right-size regulatory requirements to address the risks posed by specific payment activities. This will help to protect consumers and merchants while creating an environment conducive for innovation in payment services.”
The public consultation will run from 21 November 2017 to 8 January 2018. A copy of the public consultation paper is available on the MAS website. MAS also invites payment users to give feedback on the proposed payment user protection measures. A policy highlights document which sets out the user protection measures is available on the MAS website for comments.