Get Yourself Ready for a Cashless Society
August 27, 2021
In light of the recent Covid-19 pandemic, the landscape of today’s business world has transformed with an increasing number of consumers actively engaging in the digital platform. This eventually results in an upward surge of cashless transactions.
According to a recent post on The Straits Times, DBS Singapore sees the volume of cashless transactions doubled in the first quarter of 2020 compared to last year. With the implementation of work from home arrangements to prevent the spread of Covid-19, people now prefer to purchase online and adopt digital payment technologies rather than relying on cash transactions. This rising trend has contributed to a remarkable growth in FinTech industry. It opened up market opportunities for payment service providers (PSPs) who provide an e-wallet service, online fund transfers, digital payment tokens (“DPTs”) service and so on.
On 14 January 2019, Monetary Authority of Singapore (MAS) passed the Payment Services Act (PSA). The Act requires all companies that fall within the scope of payment services to hold an appropriate licence. As technology fast tracks the change in the future of payment systems, technology risk management is one of the important assessment criteria of MAS before granting the licence to applicants. Learn more about technology risk management and why it is so important to be practiced by Financial Institutions. In brief, new technologies are evolving the consumer behavior and the way people pay for the products or services.
Conclusion
Therefore, PSPs will need to apply for one of the three types of PSA licences which are Money Changing Licence, Standard Payment Institution Licence or Major Payment Institution Licence depending on its business model and the size thresholds. By doing so, it can mitigate the risks exposed on both merchants and consumers while moving towards a cashless society.
How we can help
- Offer Professional Advice on the Specific Licence Requirements
- Assist with the PSP Licence Application
- Review the Submission Documents (Form 1 and the supporting documents)
- Liaise with MAS on Licence Application-related matters
- Provide On-going Compliance Support Post-Licence Approval
Reference Materials
Wong, L. (2021) ‘More people go cashless, e-payment volume soars amid Covid-19 crisis’, The Straits Times, 15 April. Available at: https://www.straitstimes.com/tech/more-people-go-cashless-e-payment-volume-soars-amid-covid-19-crisis
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