On Tuesday (28 Jan), a new Payment Services Act has come into force which was announced by the Monetary Authority of Singapore (MAS). The Act will bolster the confidence and consumer protection in the use of e-payments.
The Act is based on a licensing framework that stays abreast of the new developments and different activities in payment services. It will also enlarge the regulatory scope of MAS to include payment services like digital payment token services.
The Payment Services Act of this year will replace the Money-changing and Remittance Businesses Act 1979 and the Payment Systems (Oversight) Act 2006 each respectively.
MAS said in past press releases that the ever changing payment services landscape has produced new activities and new risks which are not covered by the previous regulatory framework.
The activities regulated under the 1979 and 2006 Acts have also been made blur due to the arrival of new payment business models.
Loo Siew Yee, the MAS assistant managing director for policy, payments and financial crime remarked on Tuesday that “the Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry,”
She further added that, “The activity-based and risk-focused regulatory structure allows rules to be applied proportionately and to be robust to changing business models. The Payment Services Act will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape.”
There are four key risk areas which will be the focus of the new legislation. The first is the loss of customers’ money. The second is money laundering or terrorist financing risks. The third is fragmentation and lack of interoperability across payment solutions. The fourth is technology risks and cyber risks.
In January last year, the details of the Act were outlined by the Minister for Education Ong Ye Kung at the second reading of the Payment Services Bill in Parliament. Mr Ong presented it on behalf of the then deputy prime minister Tharman Shanmugaratnam.
“The Bill is a necessary piece in Singapore’s Smart Nation journey. It will help us build a technologically robust smart financial centre, that preserves stability while facilitating innovation and growth in the payments landscape,” Mr Ong had remarked.