Proposal to Raise Singapore E-Wallet Limits
March 6, 2023
Since 2020, the Covid-19 pandemic has significantly impacted the way people conduct transactions and accelerated the adoption of cashless payments which can be done using various methods including credit and debit cards, mobile payment applications and digital wallets. With cashless transactions, there is no need for physical contact which can reduce the risk of Covid-19 transmission. In addition, high penetration of technology coupled with the increasing use of mobile phone are the key factors driving the growth of payment transactions through mobile payment services. As more people become accustomed to using digital payment methods, the growth of cashless payments is expected to continue even after the pandemic ends.
Ongoing Obligations of E-Wallet Providers
Digital wallets, also known as e-wallets are rapidly growing in popularity as a common payment method around the world. E-wallets serve as an alternative to traditional banking services and provide access for those who are unbanked or underbanked, which will in turn promote financial inclusion and help to meet the needs of financially excluded and underserved populations. It allows users to top up their wallets via their credit cards, internet banking and users can then use the credits to make transactions with just a few clicks on their mobile devices. Recently, many e-wallet users find that their expenses are close to exceeding their e-wallets’ limits and it has restricted their abilities to use the financial services effectively. The Payment Service Act 2019 currently imposes the following limits on each e-wallet issued by the Major Payment Institutions (MPIs) to protect consumers and prevent money laundering and terrorist financing:
- Daily Stock Cap: The maximum amount of money that can be stored in an e-wallet at any one time is set at S$5,000.
- Annual Flow Cap: The maximum transaction limit over a rolling 12-month period is capped at S$30,000 per e-wallet.
Proposed Changes to the Payment Service Regulation
In response to the industry feedback, the Monetary Authority of Singapore (MAS) has proposed raising the limits on e-wallet transactions in order to facilitate greater customer convenience and bring maximum value to the users. Users will be able to store up to S$20,000 in their e-wallets, an increase from the current limit of S$5,000. Additionally, the new limits that users can spend in a year using their e-wallet will increase to S$100,000, up from the current limit of S$30,000. According to The Straits Times, MAS has concluded its public consultation in November last year and any relevant amendments to the Payment Service Regulation will be made in due course.
Conclusion
In conclusion, e-wallets are rapidly evolving to meet the needs of consumers and businesses. It is less restrictive compared to credit cards and more accessible by people from rural areas. E-wallet users should familiarise themselves with the transaction limits and terms of use to avoid exceeding the limit. MAS’s proposal to raise e-wallet limits can help users to enjoy seamless e-wallet usage and make multiple day-to-day transactions in a single payment platform
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
Tang, S. K. (2022). ‘FAQ: Is it safe to store money in apps? Here’s what you need to know’, CNA, 27 October. Available at: https://www.channelnewsasia.com/singapore/digital-wallets-mobile-apps-money-inside-safe-3014631
Woo, A. (2022). ‘MAS proposal to raise e-wallet limits could ease hassle for users curtailed by spending caps’, The Straits Times, 9 December. Available at: https://www.straitstimes.com/business/mas-proposal-to-raise-e-wallet-limits-could-ease-hassle-for-users-curtailed-by-spending-caps
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