SG launches new act to bolster and safeguard its digital payment landscape
DIGITAL payment capabilities are expanding as more players enter the market resulting in a global shift in going cashless and growing preference towards e-wallets.
One thing for sure, digital payments have been established as a critical disruptor of conventional financial services and an emerging market segment.
Singapore — among other progressive Asian countries — is making sure that the disruptor is welcomed, yet regulated.
The country is doing so through its Payment Services Act which came into effect this month. Initiated by the Monetary Authority of Singapore (MAS), the legislation symbolizes a proactive move in solidifying the digital payment landscape in Singapore.
MAS Assistant MD Loo Siew Yee said, “The Payment Services Act provides a forward-looking and flexible regulatory framework for the payments industry”.
Enforcing the new act not only allows MAS to regulate the market, but also encourages higher adoption of digital payment capabilities across the country, foster greater trust in e-payment systems, and safeguard financial activities in the digital landscape.
For one, the act offers operational licenses to digital payment service providers, including crypto exchange operators, that are interested to extend their businesses in the country.
By doing so, Singapore is making sure that the right digital players are recognized and new developments within the financial service industry are identified.
Of course, this goes without saying that Singapore will be able to seize growing revenue opportunities as more global players enter their market.
Loo added, “The Payment Services Act will facilitate growth and innovation while mitigating risk and fostering confidence in our payments landscape”.
In other words, businesses in the country can now engage actively and securely with service providers to empower themselves in an increasingly competitive digital world.
This is because the act will also address the new risks that are present with growing digital capabilities.
According to a report, the act extensively covers four key risks, namely cyber threats, customers’ money loss, terrorist financing risks, and fragmentation and lack of interoperability across payment solutions.
“The activity-based and risk-focused regulatory structure allows rules to be applied proportionately and to be robust to changing business models,” shared Loo.
Following this development, Singapore will soon close the gap with Japan when it comes it hosting cryptocurrency trading capabilities.
The country reportedly issued 22 licenses to operators since 2017. Nevertheless, Singapore’s new act remains a great growth prospect in the country’s journey to become the next digital payment hub.