Establishing a Money Transfer Business in Singapore
Establishing a money transfer business in one of the biggest financial hubs in Asia requires you obtain a license. Money transfer license in Singapore is regulated by the Money Authority of Singapore (MAS). All financial institutions are allowed to do business in the country only after they have been approved and licensed by MAS.
Who Needs a Money Transfer License in Singapore?
Last year, Singapore passed new legislation, the Payment Services Act (PSA). This act replaced the old Payment Systems (Oversight) Act 2006 and the Money-Changing and Remittance Business Act 1979 and has brought all financial service providers under a new and single legal framework.
According to PSA, the following payment service providers have to apply for a license with MAS:
- Account issuing service
- Domestic money transfer service
- Cross border money transfer service
- Merchant acquisition service
- E-money issuance service
- Digital payment token service
- Money changing service
Applying for a Money Transfer License in Singapore
PSA outlines three types of licenses based on the type(s) of payment services you intend to offer.
- Money changing license
- Standard payment institution license
- Major payment institution license
Depending on your business volume, you may apply for any one of these licenses.
Money Changing License
Any company in Singapore, offering currency exchange services should apply for a money-changing license. Companies that have a standard or a major payment institution license and are entitled to money changing business in the country, do not require a money changing license.
Standard Payment Institution License
A standard payment institution license is required by businesses that wish to offer one or more of these payment services:
- Account issuance services
- Domestic money transfer services
- Cross-border money transfer services
- Merchant acquisition services
- E-money issuance services
- Digital payment token services
A standard payment institution license also enables businesses to carry out money exchange activities without additional licensing.
Major Payment Institution License
A business offering a single or a combination of payment services (except e-money account issuing services) will need a major payment institution license if, in a calendar year, it is accepting, processing or executing a monthly average exceeding
- S$3 million for anyone payment service, or
- S$6 million for two or more payment services.
This license will be mandatory for e-money account issuing services if, in a calendar year, their daily average of e-money float exceeds S$5 million.
The Licensing Process
The licensing requirements and process depend on the type of financial services you wish to provide.
For a money-changing license, you must have a permanent office or a registered office in Singapore.
In addition to this, you will have to meet the following conditions outlined in the PSA:
- The applicant is a citizen of Singapore
- The applicant is a fit and proper person under the Guidelines on Fit and Proper Criteria
- The financial condition of the applicant is met as per MAS
- The public interest will be served by the granting of the license
- The applicant meets such other criteria for the grant of the license as the Authority considers relevant
For a standard and a major payment institution license, you should:
- Be a company or a corporation formed outside Singapore
- Have a permanent or a registered office in Singapore
- Have one Singapore citizen as executive director
- Satisfy financial requirements outlined by MAS
- Be a fit and proper person under the Guidelines on Fit and Proper Criteria
To apply for these licenses, go through this specimen of the application form. Along with the form, you will have to submit a copy of business incorporation profile as filed with the Accounting and Corporate Regulatory Authority (ACRA) of Singapore, your organizational chart, shareholding chart (if applicable), business plan, audited financial statements and your AML/CFT compliance and implementation plans.
Your application will be assessed on the basis of the information and documents you provide. Depending on the completeness of your application, the Money Authority of Singapore (MAS) will then make a decision whether to grant or refuse a license.
Read the complete Payment Services Act 2019 here.