Standard Payment Institution (SPI)

Discover the advantages of obtaining a Standard Payment Institution (SPI) licence in Singapore, regulated by the Monetary Authority of Singapore (MAS). The SPI licence is tailored for businesses operating below specific transaction thresholds, allowing them to provide essential payment services while maintaining compliance within Singapore’s evolving financial landscape. This licence is well-suited for companies offering services such as account issuance, domestic and cross-border money transfers, supporting credibility and fostering customer trust under MAS oversight.

A Standard Payment Institution (SPI) licence authorises businesses to provide specific payment services in Singapore, subject to defined transaction volume limits. Regulated by the Monetary Authority of Singapore (MAS), an SPI can conduct up to S$3 million in monthly transactions for any single service or S$6 million for multiple services, excluding e-money account issuance and money-changing. Additionally, SPIs are limited to S$5 million in daily outstanding electronic money. This licence ensures firms meet essential regulatory standards, promoting consumer protection and market integrity in Singapore’s payment services sector.

Account issuance service

Domestic & cross-border money transfer service

Money-changing service

Merchant acquisition service

E-money issuance service

Digital payment token service

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.

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.

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.

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.

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.

Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements: Regulations set to prevent the misuse of financial systems for money laundering and terrorist financing. Payment service providers must implement robust AML/CFT measures, including customer due diligence, transaction monitoring, and reporting of suspicious activities.

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.

Payment Services Act 2019 - https://sso.agc.gov.sg//Act/PSA2019

Guidelines on Licensing for Payment Service Providers - https://www.mas.gov.sg/-/media/mas-media-library/regulation/guidelines/pso/ps-g01-guidelines-on-licensing-for-payment-service-providers/guidelines-on-licensing-for-payment-service-providers-2024-1.pdf

Guidelines on Fit and Proper Criteria [FSG-G01] - https://www.mas.gov.sg/-/media/mas-media-library/regulation/guidelines/cmg/guidelines-on-fit-and-proper-criteria/fsgg01-guidelines-on-fit-and-proper-criteria-clean-version-last-revised-31-july-2024.pdf

Transaction thresholds: SPI licence holders are limited to specific transaction volumes to maintain their status. The thresholds are as follows:

Single payment service: Cannot exceed S$3 million in monthly transactions.

Multiple payment services combined: Cannot exceed S$6 million in monthly transactions.

E-money issuance: Cannot exceed S$5 million in daily outstanding e-money.

These thresholds delineate the boundary between SPI and Major Payment Institution (MPI) status. If an SPI consistently surpasses these limits, they must apply to upgrade their licence to MPI to ensure compliance with regulatory standards.

Scope of licensed activities: SPI licence holders are authorised to offer only the payment services for which they are licensed under the Payment Services Act. It is imperative that SPIs do not engage in any payment services outside their licensed scope without prior approval from the Monetary Authority of Singapore (MAS).

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.

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.