On 18 October 2022, the Monetary Authority of Singapore (“MAS”) published a consultation paper on proposed amendments to limits currently imposed on each personal payment account that contains e-money issued by major payment institutions (“MPIs”).
The consultation paper seeks views on the MAS’ proposal to:
- revise the caps on personal e-wallets, by raising the:
- maximum amount of funds that can be held at any given time from $5,000 to $20,000 (“Stock Cap”); and
- maximum total outflow of funds, over a rolling 12-month period, from $30,000 to $100,000 (“Flow Cap”).
- amend the Payment Services Regulation 2019 (“PSR”) to exempt an MPI in a White-Label Account Issuance Arrangement (as defined below) from section 24(1)(c) of the Payment Services Act 2019 (“PS Act”).
Caps on personal e-wallets
This proposal follows a survey conducted by the MAS with e-wallet account issuance service providers, and feedback collated from payment service users. In this connection, the MAS found that payment service users have benefitted from e-wallet issuers’ product offerings. The revisions in the Stock Cap and Flow Cap are thus intended to facilitate greater consumer convenience and innovation in the e-payments landscape, while ensuring that the MAS’ financial stability objective (i.e. mitigating potential significant outflows from bank deposits to non-bank e-wallets) can still be met.
In proposing to raise the Stock Cap and Flow Cap, the MAS also cautioned that the increase funds held or transferred through personal e-wallets could consequently increase potential losses incurred through scams that involve e-wallets. In this regard, the MAS will continue to work closely with the industry to ensure that they implement robust anti-scam controls that are commensurate with their business and risk profile, and also highlighted that e-wallet issuers should take this risk into account and assess if their anti-scam controls should be strengthened.
Exemption for MPI in a White-Label Account Issuance Arrangement
Under the PS Act, an MPI that issues 2 or more e-wallets to any payment service user must aggregate all the e-money in the e-wallets issued to that payment service user in applying the Stock Cap and Flow Cap (“Aggregation Requirement”).
Following feedback received from MPIs that are exploring entering into arrangements with e-money issuance service providers where (1) the MPI will issue e-wallets on behalf of a third-party e-money issuer, (2) the e-wallets will store e-money issued by the third-party e-money issuer to their payment service users, and (3) these services are provided to 2 or more e-money issuers (collectively, a “White-Label Account Issuance Arrangement”), the MAS has proposed to amend the PSR to exempt such MPIs who enter into a White-Label Account Issuance Arrangement from the Aggregation Requirement.
This means that the MPI will not be required to aggregate the e-money in e-wallets issued to the same payment service user (in respect of e-money issued by a different third-party e-money issuer) under the White-Label Account Issuance Arrangement, for the purposes of applying the Stock Cap and Flow Cap.
Timelines
The consultation closes at 1159 PM on 25 November 2022.
For further information, please contact:
Peiying Chua Heikes, Partner, Linklaters
peiying.chua@linklaters.com
