The Monetary Authority of Singapore (MAS) passed the Payment Services Act on January 28, 2020, to improve the regulatory environment. This decision aims to strengthen trust in electronic payments and ensure consumer safety. For example, previously, activities such as storage of valuables (SVF) or money transfers could be exempt from licensing. However, under the current legislation, a Singapore Payment Institution license is required for all new companies if they want to conduct such operations.

Singapore Payment Services

Under the Singapore Payment Services Act, entities must obtain a Singapore Payment Institution license to offer a range of payment services. To operate legally, businesses need this license for activities such as:

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

For a Standard payment institution license, transaction thresholds are set at:

  • S$3 million per month for any single service (excluding e-money issuance and money-changing).
  • S$6 million per month for two or more services (excluding e-money issuance and money-changing).
  • S$5 million daily for outstanding e-money.

A single service provider, like one offering domestic money transfers, faces a $3 million monthly transaction limit. If multiple services are offered, such as domestic and cross-border transfers, the threshold rises to $6 million monthly. Exceeding these limits necessitates applying for a Major Payment Institution license.

Digital Payment Token License in Singapore 2024

As stated in the Payment Services Act (PSA) 2019, “digital payment token (DPT) providers” is the term under which the regulation is carried out. Hence, a digital payment token license is required to successfully engage in providing services (standard payment institution license). To mitigate consumer risks and ensure compliance with technological and cybersecurity standards, the Monetary Authority of Singapore (MAS) introduced an update on November 23, 2023.

Key updates

  1. Addressing and informing on conflicts of interest
  2. Publishing listing criteria for DPTs
  3. Developing customer complaint and dispute resolution policies

To protect consumers, DPT providers must:

  • Assess customer risk awareness for DPT services
  • Avoid incentives for cryptocurrency trading
  • Prohibit financing, margin, or leverage in transactions
  • Reject local credit card payments for DPT services
  • Cap cryptocurrency values in customer net worth assessments

These regulations, part of MAS’s cryptocurrency guidelines, will be phased in starting mid-2024.

Regulatory Overview of DPT Services

The Payment Services Act (PSA) is the primary legislation governing cryptocurrency businesses in Singapore, adopted in 2019. The goal was to streamline the regulatory landscape, including licensing criteria and exemptions. By issuing numerous directives and guidelines and directives to clarify regulatory standards, MAS (Monetary Authority of Singapore) is actively improving the rules for the provision of DPT license services:

  • Notice PSN02 and its Guidelines on the Prevention of Money Laundering and Countering the Financing of Terrorism for DPT Services.
  • Guidelines on Providing DPT Services to the Public [PS-G02].

It was proposed to update the Payment Services Regulations 2019, which was the MAS consultation paper in May 2023. MAS introduced new powers for DPT services to protect client assets in a statutory trust on July 3, 2023, aimed at reducing the risk of loss or misuse and ensuring the recovery of assets in the event of insolvency. The public consultation on these draft amendments concluded on August 3, 2023 was a significant step towards enhancing the protection of DPT service users.

Benefits of Securing a Singapore Payment Institution License

Below, we will discuss the main advantages of obtaining a MAS digital payment token license:

  1. Facilitated entry into the Asia-Pacific market, as the license opens the door to Singapore, a crucial financial center.
  2. Strengthening trust among consumers, partners and stakeholders, as MAS accreditation significantly enhances the company’s reputation.
  3. Upon obtaining this license, it becomes possible to provide a whole range of services, including digital payment tokens.
  4. Ensuring compliance with anti-money laundering, counter-terrorist financing, and consumer protection regulations through MAS supervision of licensed entities.
  5. MAS «sandboxes» for testing and implementing new offerings in a regulated but flexible environment.
  6. Facilitating cooperation with banks, fintech companies, and other payment organizations, which has a positive impact on innovation solutions for customers and businesses in general.
  7. Ensuring international trust in licensed companies due to Singapore’s strict regulatory standards.

Singapore Payment Institution License and Cyprus EMI License

If an applicant wants to become a holder of a Singapore payment institution license, then registration, a local office, and a paid-up minimum capital of S$100,000 are required. Directors must be residents of Singapore or holders of an employment certificate. It is worth noting that the Monetary Authority of Singapore requires the appointment of heads of IT and security departments. In addition, keep in mind the Major Payment Institution License, which is required for larger volumes of transactions with increased capital.

When considering an EMI License in Cyprus, you need an operational plan for payment services and electronic money, as well as a strategic business plan with a three-year budget. A reliable management system and a strategy for protecting funds must be in place. Applicants must also provide comprehensive information on ownership, management, and operations, ensuring compliance with anti-money laundering regulations.

Criteria for Acquiring a Singapore Payment Institution License

Eligibility requirements include:

  • Must be a business registered in Singapore or a foreign branch established in Singapore
  • A local registered office address is required, or a physical office setup in Singapore.
  • Minimum SGD 100,000 paid-up capital in the company’s bank account.
  • At least one executive director who is a Singapore Citizen or Permanent Resident or one non-executive director who is a Singapore Citizen or Permanent Resident, and one executive director with a Singapore Employment Pass.

IT and Security Leadership (Following MAS Technology Risk Management Guidelines, January 18, 2021):

  • Appointment of Chief Information Officer, Chief Technology Officer, or Head of IT for overseeing IT strategy and risk management
  • Appointment of Chief Information Security Officer or Head of Information Security to manage information security strategy and asset protection

For an MPI license (Major Payment Institution), additional criteria include:

  • Minimum paid-up capital raised to SGD 250,000
  • SGD 100,000 for monthly transactions up to SGD 6 million; SGD 200,000 for transactions above this threshold.
  • Cash deposit with MAS or bank guarantee as options for maintaining the security deposit.
  • Mandatory safeguarding of customer funds using guarantees or trust accounts for enhanced protection.

Stages of Securing a Singapore Payment Institution License

Singapore Company Registration

  • Provision of local company address, nominee director, and secretary.
  • Process completion is estimated at one week.

Corporate Bank Account Setup

  • Opening a corporate bank account to deposit required minimum paid-up capital.
  • Completion timeframe: 4 weeks.

Preparation of Business Plan and Compliance Policies

  • Development of a comprehensive business plan and AML/CT policies.
  • Documentation for technology risk management, cyber hygiene, and regulatory compliance.

Physical Office Arrangement

Sourcing of physical office space and preparation of lease agreement according to local real estate regulations.

Recruitment of Executive Director

Assistance in hiring a local executive director, including conducting interviews and preparing employment contracts.

Specialized Staff Recruitment (If Needed)

Recruitment services for a Compliance Officer, Chief Technology Officer, and Chief Information Security Officer.

Employment Pass Application

  • For clients aiming to be the executive director, assistance with Employment Pass application.
  • Provision of a nominee non-executive director to meet mandatory requirements if preferred.

Singapore Payment Institution License Application Submission

Final application submission to MAS, with feedback expected within ten weeks.

Travel Rule Compliance

Under the Travel Rule, as mandated by the Monetary Authority of Singapore (MAS) in alignment with Financial Action Task Force (FATF) standards, Digital Payment Token (DPT) service providers have specific Anti-Money Laundering (AML) responsibilities. These include collecting and exchanging clients’ personal information during digital payment token transactions.

Essentials of the Travel Rule for DPT Providers

  1. DPT service providers must share sender and recipient information for every transaction.
  2. The rule applies to all digital payment token transactions, whether sending or receiving, on an originator’s or beneficiary’s behalf.

Information Requirements Based on Transaction Amounts

For Transactions Below S$1,500:

Name and account number (or unique transaction reference) of both the originator and beneficiary.

For Transactions Above S$1,500:

Additional information may include the originator’s residential, registered, or business address, unique identification number, and the date and place of birth, incorporation, or registration.

Additional Considerations

The rule outlines specific actions for scenarios involving non-hosted wallets and situations where information may be incomplete or missing.

MAS’s Stance on Compliance

No grace period was offered for the Travel Rule compliance. However, MAS has granted an exemption under the Payment Services (Exemption for a Certain Period) Regulations 2019. Thus, if DPT service providers were already providing services before January 28, 2020 and notified MAS within 30 days, they can operate without a license for a certain period. Starting from January 28, 2020, entities had six months to apply for a digital payment token service license in Singapore, with an extension of the exemption period pending the outcome of the application.


How does the MAS evaluate applications for a Singapore payment institution license?

This process is based on several discretionary criteria from the MAS. Among them are the suitability and integrity of the company’s directors and controllers, as well as their knowledge and experience in the payment services industry. In addition, it is important to manage technological risks and conduct an audit following the Payment Services Act.

What is required to obtain a DPT license?

To do this, you must have a standard payment institution or MPI license. First, you need to be registered in Singapore, have a local office, and maintain a minimum paid-up capital of S$100,000. It is necessary to appoint a Chief Information Officer and a Chief Information Security Officer to manage IT and security risks under the latest MAS guidelines.

Who should obtain a payment institution license?

This license is primarily useful for those who plan to open accounts, domestic and international money transfers, e-wallets, and of course, digital payment tokens.

What are the benefits of a digital payment token license holder?

Having a digital payment token license, namely a payment institution license, you immediately get access to the reliable financial market of the financial center of Asia. In addition, the trust of partners and customers, access to regulatory sandboxes for product testing, and so on, is significantly increased.

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