The expanded scope of regulated payment services takes effect today

04 Apr 2024

The Payment Services (Amendment) Act 2021 (“PS(A)A”) has been gazetted on 28 March 2024 and came into operation today, 4 April 2024 (“Commencement Date”).

The PS(A)A expands the scope of regulated payment services under the Payment Services Act 2019 (“PS Act”) and adds to the Monetary Authority of Singapore’s (“MAS”) powers under the PS Act to allow it to impose user protection measures on certain digital payment token service providers. For a more detailed overview of the expanded regime brought by the PS(A)A, please refer to our previous update on the PS(A)A (link available here).

These amendments affect entities which are either newly regulated due to the PS(A)A, or currently licensed under the PS Act and are required to vary their licence to include the newly regulated payment services introduced by the PS(A)A (“affected persons”).

However, a six-month licensing exemption starting from the Commencement Date will be extended to such affected persons to allow them to continue their operations in Singapore while they prepare and apply for a relevant licence or variation of their licence under the PS Act (as amended by the PS(A)A). (“Transitional Exemption”).

Same as the transitional arrangements that applied when the PS Act first came into force, the duration of this Transitional Exemption will be extended to the date on which the licence application or variation is approved, refused or withdrawn. However, to rely on the Transitional Exemption, an affected person must:

1. have carried on a business of providing a newly regulated payment service before the Commencement Date;
2. submit a notification form to the MAS by 3 May 2024, indicating the date on which the affected person had commenced the business of providing the newly regulated payment service and certain other information such as the total value of transactions of the previously unregulated digital payment token services for the calendar year ended 31 December 2023, information about the 20% controllers etc (please refer to the link here for the specimen form); and
3. submit a relevant application for a payment services licence by 4 October 2024.

The MAS has also introduced a new requirement for applicants to submit an attestation report prepared by an external auditor by 4 January 2025 in order for the Transitional Exemption to be extended until the date which the licence application or variation is approved, refused or withdrawn. The scope of the assessment will include the following:

1. implementation of policies and procedures to manage and mitigate money laundering and terrorism financing risks; 
2. implementation of policies and procedures regarding the requirements for segregation and custody of customers’ assets for persons providing digital payment token services; and
3. commencement date of providing the newly scoped-in payment services.

Businesses which are either providing or intending to provide a digital payment service regulated under the PS Act (as expanded by the PS(A)A) may also wish to refer to our previous updates on the upcoming regulatory measures for digital payment token service providers proposed by the MAS, which are intended to come into force in 2024 (links available here and here).