Major Payment Institution (MPI)

Major Payment Institution (MPI) Licences provide a robust regulatory framework for businesses offering high-volume payment services in Singapore. Regulated by the Monetary Authority of Singapore (MAS), MPI Licences are essential for firms that exceed specific transaction thresholds, enabling them to conduct multiple payment services without volume restrictions. Designed to ensure compliance and operational excellence, the MPI Licence helps businesses meet stringent regulatory standards, fostering trust and credibility within Singapore’s dynamic financial ecosystem.

Overview

Capital Requirements

MPI licence holders must have a minimum base capital of S$250,000. They must also maintain sufficient capital buffer in excess of the base capital requirement. In addition to the base capital requirement, MPI licence applicants must also provide a security deposit, prior to commencing business, in the form of a cash deposit with MAS or a bank guarantee in the prescribed format. This deposit is S$100,000 if the average, over a calendar year, of the total value of all payment transactions in one month does not exceed S$6 million for any one payment service, or S$200,000 in all other cases.

Transaction Limitations

MPI licence holders can conduct multiple payment services without being subject to the threshold limits that apply to SPI licence holders. However, as the scale of their operations pose more risk, they are subject to more comprehensive and robust regulation.

Safeguarding Requirements

MPI licence applicants must provide security in the form of a cash deposit with MAS or a bank guarantee. The amount can go from S$100,000 to S$200,000, depending of the services provided by the firm. MPIs are also required to implement measures to safeguard user funds.

Jurisdictional Limitations

The MPI licence is specifically for conducting regulated activities within Singapore. However, entities that wish to operate outside Singapore or engage in cross-border activities must comply with additional regulations.

Legal & Regulatory Framework

Payment Services Act 2019 (PS Act)
Payment Services Regulations 2019
PSN01 Prevention of Money Laundering and Countering the Financing of Terrorism – Specified Payment Services
PSN03 Notice on reporting of suspicious activities and incident of fraud
Guidelines on Licensing for Payment Service Providers [PS-G01]
Guidelines on Fit and Proper Criteria [FSG-G01]
Guidelines on Risk Management Practices – Technology Risk
Guidelines to Notice PSN01 on Prevention of Money Laundering and Countering the Financing of Terrorism - Specified Payment Services

Key Restrictions

MPIs are restricted to providing only the payment services they are licensed for under the PS Act. They must adhere to strict compliance and risk management standards and meet annual audit requirements. Additionally, MPIs must fulfil ongoing regulatory obligations, including AML/CTF measures and business conduct standards.

Regulatory authorisation process

The Monetary Authority of Singapore (MAS) usually assesses a complete application within 6 months. However, this can vary depending on the application's complexity and the completeness of the information provided.

The Monetary Authority of Singapore (MAS) application fee can range from S$500 to S$1,500, depending on the firm's activity type.

Key Personnel Requirements

MPIs must appoint at least one executive director who is a Singapore Citizen, PR, or EP holder, and another director who is a Singapore Citizen or PR. Key personnel, including directors and the CEO, should have relevant industry experience and meet MAS' fit and proper criteria. A representative must be present at the registered office to handle customer queries and complaints.

Regulatory Updates

Deep dive into Major Payment Institution (MPI)

Introduction

Discover the benefits of obtaining a Major Payment Institution (MPI) licence in Singapore, regulated by the Monetary Authority of Singapore (MAS). The MPI licence enables businesses to offer a range of payment services without transaction volume restrictions, supporting their growth and operational capacity in the region’s competitive financial ecosystem. Designed for larger-scale payment service providers, the MPI licence ensures compliance with rigorous standards that promote financial stability and consumer trust.

Definition

A Major Payment Institution (MPI) licence allows businesses to conduct multiple payment services, exceeding specified thresholds, such as S$3 million in monthly transactions for a single service or S$6 million for combined services. Regulated by MAS, MPIs must meet higher regulatory requirements compared to Standard Payment Institutions (SPIs), including a minimum base capital of S$250,000 and stringent oversight criteria. This classification ensures that high-volume payment providers maintain compliance and support the integrity of Singapore’s financial system."

Services Provided

Account issuance service
Domestic & cross-border money transfer service
Money-changing service
Digital payment token service
Merchant acquisition service
E-money issuance service

Additional Information (Services)

Account issuance service: Issuing a payment account, or any service relating to any operation required for operating such accounts. Examples include electronic wallets (e-wallets) or a stored-value card that can be used to pay at various merchants or to transfer funds to other parties.
Domestic & cross-border money transfer service: Providing local funds transfer service in Singapore, which could include payment gateway services and payment kiosk services. Additionally, internationally providing inbound or outbound remittance service in Singapore, as well as facilitating remittance between entities in different countries even if monies are not accepted or received in Singapore.
Money-changing service: The business of buying or selling foreign currency notes.
Digital Payment Token (DPT): Services include activities such as buying or selling DPTs (commonly known as cryptocurrencies), providing a platform for individuals to exchange DPTs, and transmitting or arranging the transmission of DPTs. Additionally, DPT services encompass the provision of custodian wallet services for holding DPTs, as well as actively facilitating the buying or selling of DPTs without requiring possession of funds or DPTs directly.
Merchant acquisition service: Providing the service of accepting and processing payment transactions for a merchant under a contract. This service typically includes the provision of a point-of-sale terminal or online payment gateway. Merchant acquirers may also be providing a money transfer service if they facilitate the transfer of funds.
E-money issuance service: Issuing e-money, which can be used for payment or fund transfers.

Additional Information (Legal & Regulatory Framework)

Payment Services Act 2019 (PSA): The primary legislation regulating payment services in Singapore, providing a comprehensive framework for the licensing and supervision of payment service providers. It sets out the requirements and standards for entities offering services such as account issuance, money transfers, and e-money issuance, ensuring financial stability and consumer protection within the payment ecosystem.
Payment Services Regulations 2019: These regulations complement the Payment Services Act by detailing specific requirements for Major Payment Institutions (MPIs). They outline licensing criteria, capital requirements, and safeguarding measures to protect customer funds. The regulations also mandate reporting and disclosure obligations, along with restrictions on certain business activities, ensuring that MPIs operate within a structured and secure framework.
Guidelines on Licensing for Payment Service Providers: These guidelines outline the licensing requirements and processes for payment service providers in Singapore under the Payment Services Act 2019. They detail the criteria for different classes of licences, the obligations of licence holders, and the compliance standards to be met.
Guidelines on Fit and Proper Criteria [FSG-G01]: These guidelines ensure that controllers, directors, and key personnel meet the necessary standards of integrity, competence, and financial soundness.
Notice PSN01 on Prevention of Money Laundering and Countering the Financing of Terrorism: This notice establishes specific AML/CFT requirements for MPIs. It mandates customer due diligence measures, ongoing transaction monitoring, and the reporting of suspicious activities. MPIs must also implement internal policies, procedures, and controls to strengthen their defences against money laundering and terrorism financing.

Additional Information (Key Restrictions)

Scope of licensed activities: MPI licence holders are authorised to offer only the payment services for which they are licensed under the Payment Services Act. It is imperative that MPIs do not engage in any payment services outside their licensed scope without prior approval from the Monetary Authority of Singapore (MAS).
Compliance requirements: MPIs must adhere to stringent compliance and risk management standards, including the implementation of AML/CFT measures, maintaining an appropriate compliance function, and establishing internal policies to meet regulatory obligations. Qualified compliance personnel must oversee these functions to ensure adherence to all applicable laws.
Audit requirements: MPIs are required to appoint independent auditors to conduct annual audits of their accounts and transactions, ensuring compliance with regulations. Audit findings must be reported to MAS, and any issues identified must be addressed promptly.

Admission Criteria

Governance and ownership requirements - Applicants must comply with the governance and ownership structure set out in Appendix 1 of MAS’ Guidelines on Licensing for Payment Service Providers, and must be registered with ACRA.
Fit and Proper - The applicant must satisfy MAS that its sole-proprietor, partners, or directors and CEO, shareholders and employees, as well as the applicant itself, are fit and proper, in accordance with the Guidelines on Fit and Proper Criteria [FSG-G01].
Competency of Key Individuals - The applicant must ensure that its sole- proprietor, partners, or executive directors and CEO have sufficient experience in operating a business in the payment services industry or related areas in the financial services industry, including having sufficient understanding of the regulatory framework for payment service providers in Singapore.
Permanent place of business or registered office - The applicant must have a permanent place of business or registered office in Singapore. It must be an office area where the applicant’s books and records can be securely held. The applicant must also appoint at least one person to be present to address any queries or complaints from customers.
Base Capital - Applicants must satisfy to the MAS that they are aware of the base capital requirements for the licence they are applying for, and demonstrate that they can meet these requirements on an ongoing basis. In view of this obligation, the applicant must ensure that it maintains sufficient capital buffer in excess of the base capital requirement, bearing in mind the scale and scope of its operations and the potential for profit and losses.
Security - MPI license applicants must also provide a security deposit, prior to commencing business, in the form of a cash deposit with MAS or a bank guarantee in the prescribed format. This deposit is S$100,000 if the average, over a calendar year, of the total value of all payment transactions in one month does not exceed S$6 million for any one payment service, or S$200,000 in all other cases.
Compliance Arrangements - The applicant must have in place plans for effective compliance arrangements and ensure that it puts in adequate compliance resources that are commensurate with the nature, scale and complexity of its business. Minimum requirements are set out in Appendix 2 of MAS’ Guidelines on Licensing for Payment Service Providers.
Technology Risk Management - Where the applicant intends to provide online financial services, it must perform a penetration test of its proposed online financial services, remediate all high-risk findings identified, and conduct independent validation on the effectiveness of the remediation actions.
Audit Arrangements - The applicant must have plans in place for adequate independent audit arrangements to regularly assess the adequacy and effectiveness of its procedures, controls, and its compliance with regulatory requirements. The audit may be conducted by an internal audit function within the applicant, an independent internal audit team from the head office of the applicant, or outsourced to a third-party service provider.
Annual Audit Requirements - The applicant must have in place plans to meet the annual audit requirements as set out in section 37 of the PS Act.
Letter of Responsibility and/or Letter of Undertaking - Where appropriate, MAS may require applicants to procure a Letter of Responsibility and/or Letter of Undertaking from the applicant’s majority shareholders, parent company and/or related company. The template will be provided by MAS if the application is approved.