More than 200 entities held MAS payment services licenses as of 2024, with around 30 Major Payment Institution (MPI) licenses among them.

Licensing Volume and Structure in 2024

As of 2024, more than 200 entities held payment services licenses issued by the Monetary Authority of Singapore (MAS), marking a significant scale of regulated activity in the city-state's payments ecosystem. Among these licensees, approximately 30 were classified as Major Payment Institutions (MPIs)—a distinction that carries higher standards and broader operational capacity. The remaining licensees are predominantly Standard Payment Institutions (SPIs), which operate under stricter transaction volume and float limits.

The licensing framework is established under the Payment Services Act 2019 (PS Act), which commenced on 28 January 2020 and created a unified regulatory regime for payment service providers. The PS Act was subsequently amended on 4 April 2024, introducing new requirements including operational licensing for digital payment token providers.

%Source: Orionmano Industries

The PS Act defines payment services across multiple categories, including domestic money transfers, cross-border money transfers, merchant acquisition, e-money issuance, digital payment token (DPT) services, and money-changing. The 4 April 2024 amendments specifically brought DPT services under the full licensing framework, requiring providers that previously operated under transitional exemptions to secure formal licenses.

Distinct Treatment of Major Payment Institutions

The bifurcation between MPI and SPI licenses rests on clear statutory thresholds set by the MAS. SPI licensees are subject to specific limits on transaction volume and float: S$3 million in monthly transactions for a single payment service (excluding e-money account issuance and money-changing), S$6 million in monthly transactions for two or more payment services, and S$5 million in daily outstanding e-money. Exceeding these thresholds triggers the requirement to apply for an MPI license.

MPI licensees, by contrast, are not subject to these volume or float limits, allowing them to scale operations without regulatory constraints on transaction capacity. This flexibility makes the MPI license attractive for firms handling high-volume cross-border payments, digital payment token services, and large-scale e-money issuance.

The MAS applies a rigorous set of criteria when evaluating MPI applications, including:

• The track record and financial condition of the entity, its holding company, or related corporations.
• The entity's operational readiness, including demonstrated ability to comply with regulatory requirements.
• The commitment of the entity's holding company to conduct operations in Singapore.
• Whether the entity, its holding company, or related corporations are subject to proper supervision by a competent regulatory authority.
• Whether granting the license would serve the public interest.

For foreign-owned applicants, the MAS also requires that the parent company possess a good track record and reputation, be of significant size, and be adequately regulated and supervised by its home authority for anti-money laundering and countering the financing of terrorism (AML/CFT). Foreign banks applying for MPI licenses must rank among the top banks in their country of incorporation.

2024 Regulatory Developments

On 26 July 2024, the MAS updated the Guidelines on Licensing for Payment Service Providers (PS-G01), with these changes taking effect on 26 August 2024. The revisions apply to both current and future SPIs and MPIs under the PS Act, and address both the application process and ongoing business conduct requirements.

Key changes to the licence application process include:

• New applicants for SPI or MPI licences, existing licensees applying to vary their licence to add a DPT service, and any other applicant deemed appropriate by the MAS (such as those with complex business models) must now submit a legal opinion from a law firm experienced in advising on the PS Act in Singapore. The legal opinion must include a clear and concise summary of the applicant's business model and an assessment of whether the proposed activities fall within the scope of regulated payment services.

• Applicants granted an in-principle approval (IPA) are required to appoint a qualified independent external auditor to perform an independent assessment (IA) of the applicant's internal policies, procedures, and controls (IPPCs) in the areas of technology and cybersecurity risks—specifically covering cyber-hygiene, data loss prevention, penetration testing, and digital wallets and smart contracts. The MAS retains the authority to require the applicant to appoint another external auditor to re-perform the assessment if concerns arise.

These procedural enhancements reflect the MAS's ongoing effort to improve review efficiency and ensure applicants have robust governance structures before commencing operations. The updates also align with the broader regulatory direction under the 4 April 2024 amendments, which expanded the PS Act's scope to fully encompass digital payment token services.

Outlook

With the full licensing requirement for DPT services now in effect and the MAS continuing to refine its guidelines, the number of MAS payment services licensees is expected to grow further. Entities that previously operated under transitional exemptions are progressively moving into the formal licensing regime, and the increased procedural clarity from the 2024 guideline updates may attract new applicants seeking regulatory certainty. The MPI license category, while concentrated, is likely to expand as firms scale beyond SPI thresholds in high-growth segments such as cross-border payments and digital assets.