
Navigating MAS Payment Services Act Changes: 2023–2025
Over the past two years, Singapore has significantly strengthened its regulatory framework for payment services in response to the rapid growth of digital assets, cross-border payment models, and evolving financial crime risks.
MAS has implemented these changes through a phased approach, with major deadlines culminating in 2024 and 2025.
- Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) requirements
- Digital Payment Token (DPT) service regulations
- Technical amendments to existing framework.
July 2023 – DPT-Specific Consultation
MAS issued a second consultation paper specifically targeting amendments to the Payment Services Regulations 2019. This consultation focused on:
- Key segregation requirements for DPT services
- Custody requirements for digital assets
- User protection mechanisms for DPT customers.
First phase of PSA Amendments were introduced:
- Expanded regulatory scope
- Inclusion of previously unregulated payment services
- Explicit coverage of DPT services under regulatory oversight
- Enhanced definition of payment services activities
- New compliance obligations
- Updated AML/CFT requirements aligned with FATF standards
- Mandatory risk assessment and management framework
- Enhanced due diligence procedures
- DPT Service Provider requirements
- Segregation of customer funds and digital assets
- Custody and safekeeping obligations
- Risk disclosure requirements to customers
- Enhanced governance and operational risk requirements.
MAS updated its FAQ to provide clearer explanations and enhanced guidance on:
- Application process for new licenses
- Eligibility criteria for different service categories
- Transition arrangements for existing operators
- Compliance timelines and implementation support.
- New application requirements
- Mandatory legal opinion from qualified law firm
- Independent assessment by external auditors
- Enhanced financial and operational due diligence
- Structured application review process
- Heightened security for DPT services
- Additional documentation requirements
- Enhanced background checks for key personnel
- Stricter capital adequacy requirements
- Technology risk management assessments.
- Money transfer flexibility
- Enhanced operational flexibility for businesses and sole proprietors
- Streamlined cross-border payment processing
- Reduced regulatory burden for specific transaction types
- Merchant acquirer inclusion
- Explicit regulatory coverage for merchant acquiring services
- Clarified compliance obligations for payment facilitators
- Enhanced consumer protection measures
- Enhanced transaction reporting standards
- Improved data quality and timeless requirements
- Strengthened regulatory oversight capabilities
- Key requirements
- Mandatory licensing for all DTSPs operating in or from Singapore
- Immediate compliance required or cessation of operations
- Covers Singapore-based providers serving overseas clients
- Licensing changes
- Minimum capital adequacy requirements
- Appointment of Singapore-based compliance officer
- Annual independent audits
- Stringent AML/CFT measures
- Cyber security standards and technology risk management
- Ongoing regulatory reporting obligations
- Subsidiary legislative framework introduced
- FSM-N27: Prevention of Money Laundering and Terrorism Financing
- FSM-N28: Reporting Suspicious Activities and Fraud Incidences.
Practical Considerations
Firms seeking to be licensed under the Payment Services Act should budget for increased compliance costs including legal opinions and audits. It is important to prepare comprehensive documents for enhanced due diligence expected from the regulator. Firms should consider engaging third-party advisors for support and guidance to ensure readiness for the rigorous application process.
Existing licensed payment service providers must stay fully informed of recent regulatory updates and verify that both policies and operational practices align with MAS standards. Firms should also prepare for increased scrutiny from the regulators especially if past reporting has been inaccurate or delayed.
How Can Waystone Help
Waystone offers a comprehensive suite of compliance solutions to support firms who are looking to be licensed under the Payment Services Act. We assist with providing end-to-end licensing support, policy and procedure development, AML/CFT framework, compliance advisory, internal audit and gap analysis.
For already licensed firms, we provide essential ongoing compliance support. Our practical, sector-specific expertise helps firms meet MAS expectations efficiently while minimising regulatory risks.
If you have questions about any of the topics discussed in this article or would like to learn more about our APAC Compliance Solutions, please contact your usual Waystone representative or reach out to us below.