Securing a Singapore licence for Stored Value Facility services in 2024
Since 2003, Healy Consultants Group assists our multi-national Clients to register optimal vehicles for financial services companies across the globe. In 2021, Singapore remains one of the most attractive locations for the setup of a Stored Value Facility (SVF) LLC. However, the provision of e-wallet and e-payment cards and other payment services now requires a license in Singapore. See below for more information on how to secure one:
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What are stored value facilities?
- Stored value facilities (SVFs) are all types of prepaid cards and vouchers which allow their users to hold e-money and make payments up to the amount of the stored value. Until January 2020, Singapore regulations differentiated between i) single-purpose SVF, which can only be used to make payments or collect cash with the business which issued the card/voucher (for instance, a prepaid top-up card) and ii) multi-purpose SVF, which allows customers to use the card/voucher with other businesses not necessarily related to the business of the issuer (for example, Singapore public transport cards, which can also be used to make payments in selected shops).
- Prepaid (stored value) cards have been in use for a long time. In Singapore, most famous examples include i) EZ-link (public transportation) ii) NETS cash card (for debit payments) iii) Capita Voucher iv) XFERS wallet and v) NETS Flash Pay. Given their wide use, these SVFs are tightly regulated by the Monetary Authority of Singapore (MAS) as “widely accepted (WA) SVFs”.
- However, plenty of other businesses offer SVF services, which were not subject to licensing requirements until 2020 provided their daily float value remained below SG$30 million (US$20 million).
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What are the advantages of registering a Singapore company to offer SVF services?
- If properly structured, Singaporean SVF companies can be legally exempt from i) Singaporean corporate income tax ii) withholding tax and GST and iii) Singaporean regulatory licenses;
- Using an SVF scheme is a solution to safely and quickly start issuing electronic money in Singapore;
- It takes less than one week to register a Singapore SVF company.
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Current Regulatory license requirements
- All SVF and Payment Service companies incorporated or starting business in Singapore are legally required to secure a payment services licence with Monetary Authority of Singapore (MAS)
- Any Singapore company registered to carry out the following payment services, including SVF activities, must be licensed:
- Account issuance – for example, an e-wallet or non-bank issued credit card.
- Domestic money transfer – for example, fund transfer services in Singapore such as payment kiosks or payment gateway services.
- Cross border money transfer – inbound/outbound fund transfer remittance services in Singapore.
- Merchant acquisition – where a service provider accepts and processes payment transactions for a merchant. For example, operation of online payment gateways, or the provision of point-of-sale terminals.
- E-money issuance in Singapore – enabling users to pay merchants or transfer e-money to other individuals (e g money stored in e-wallets).
- Digital payment token – buying/selling digital payment tokens (for example, cryptocurrencies), or services which provide a platform which facilitates the exchange of such digital payment tokens in Singapore.
- Money-changing – buying/selling of foreign currency notes in Singapore. For example, money-changers which profit from the exchange of physical currency notes.
- Three payment services licences are available:
- Money-Changing Licence – licence holders can only conduct money-changing services. Licensees must: i) have a permanent place of business or ii) registered office in Singapore.
- Standard Payment Institution Licence – licence holders can conduct any combination of the seven regulated activities indicated, but below specified thresholds. These thresholds are i) accepting, processing, or executing a monthly average of payment transactions of up to S$3 million for any activity, or up to S$6 million for two or more activities, in a calendar year ii) e-money account issuance providers must apply for this licence if they issue an average daily e-money float of up to $5 million in a calendar year.
- Major Payment Institution Licence – licence holders can conduct any combination of the seven regulated activities indicated above specified thresholds. These are: i) the average total value of all payment transactions by the business in one month exceed specified thresholds of S$3 million for one payment service, or S$6 million for two or more payment services, in a calendar year ii) e-money account issuance providers which exceed an average daily e-money float of up to S$5 million over a calendar year.
- To establish an SVF business in Singapore, the MAS requires multi-national Clients to satisfy the following regulatory requirements:
- Secure a payment services licence – this will usually be either i) Standard Payment Institution Licence or for larger SVFs ii) a Major Payment Institution Licence.
- Engage a Singapore executive director – companies operating under Standard Payment Institution Licence and Major Payment Institution Licence require at least one executive resident director (Singapore citizen/Singapore Permanent Resident). Healy Consultants Group can assist our Client to recruit a qualified director (click link). In the meantime, Healy Consultants Group can act as the nominee professional, passive resident director (click link);
- Have a permanent business presence in Singapore – Healy Consultants Group will assist our Client to secure a physical office premises in Singapore. MAS regulations stipulate that the licensee must always also appoint at least one person to be present, at a time specified by MAS, at the premises. The licensee must also keep books of all transactions in relation to the service.
- Conduct monthly/annual MAS reporting – Standard Payment Institutions and Major Payment Institutions must submit account statistics, transaction value and volume, and e-money float amounts to MAS monthly. Money Changers must submit details annually. Healy Consultants Group’s in-house Accounting and Tax Department will timely, accurately and completely discharge monthly and annual Government reporting.
- Know Your Customer due diligence procedures – All licensees providing payment services which carry money laundering/terror financing risks must comply with specific MAS risk mitigating measures. Healy Consultants Group Singapore Legal and Compliance Department will assist here;
- Anti-Money Laundering (AML) / Countering Financing of Terrorism (CFT) policies and procedures – MAS AML/CFT requirements are calibrated according to the degree of risks posed by each payment service. Measures imposed under the PS Act are similar to previous AML/CFT requirements on entities regulated under PS(O)A and MCRBA. These include requirements to conduct customer due diligence, monitor transactions, perform screening, report suspicious transactions and keep FAQs on the Payment Services Act 4 October 2019 16 adequate records. See this webpage for more information about risk criteria.
- AML/CFT compliance officer – in accordance with the new AML/CFT obligations, SVFs are required to appoint an AML/CFT compliance officer, who should be independent from Management. The regulations, however, do not require such an officer to be based in Singapore, although the appointment of a resident will be viewed favourably by MAS.
- Adequate paid-up share capital – where the applicant applies for a Standard Payment Institution licence, a Singapore-incorporated company requires a minimum base capital of S$100,000. For a Major Payment Institution, the minimum base capital is S$250,000.
- Security deposit – companies applying for a Major Payment Institution licence must make a deposit of S$100,000 if, during a calendar year, the value of all payment transactions that are accepted, processed or executed by the licensee in one month is S$6 million maximum for any one payment service it provides. The deposit is S$200,000 in all other cases. Standard Payment Institution Licence holders are exempt from the security deposit requirement.
- Click here to see how we can help our multi-national Clients with the above formalities.
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How we can help our multi-national Clients
Healy Consultants Group will assist our Clients as follows:
Regulatory requirement Simple, practical low- cost solution Fee Other relevant considerations Secure payment services licence Engage Healy Consultants Group to secure same US$8,950 All MAS requirements must be met before submission of application Resident director Engage Healy Consultants Group to hire resident director US$3,450 Client to thereafter pay monthly salary or directorship fee to their preferred director Singapore permanent business presence Engage Healy Consultants Group to assist to secure same US$950 Client to thereafter pay annual rent to landlord directly Monthly/annual MAS reporting The above director to complete monthly/annual filings - Alternatively, Healy Consultants Group to assist your Firm with the same for a fee of US$660 per filing Know Your Customer due diligence procedures Engage Healy Consultants to ensure Client passes MAS Fit and Proper persons test - AML/CFT policies and procedures Healy Consultants Group to supply you an AML/CFT policy US$7,250 AML/CFT policies and procedures Healy Consultants Group to supply you an AML/CFT training program US$3,950 AML/CFT officer Engage Healy Consultants Group to hire AML/CFT officer US$3,450 Client to thereafter pay a monthly salary/ fee to preferred AML/CFT officer Adequate paid-up share capital Inject SG$100,000 to a Singapore or international corporate bank account;
Then engage Healy Consultants Group to update ACTA recordsUS$550 If required, Healy Consultants Group to secure corporate bank account numbers for an additional fee of US$5,950;
Refer to this web page to understand our guaranteed corporate bank account solutions, or your money back.Security deposit exemption Engage Healy Consultants Group to negotiate a waiver with MAS US$1,000 -
Our SVF fees
Singapore’s payment services Standard cost Draft invoice Singapore offshore SVF company US$18,690 View invoice PDF Singapore resident SVF company with license US$34,115 View invoice PDF Licensing services only Invoice US$20,600 View invoice PDF -
Other legal and compliance considerations
- Foreigners who are not living in Singapore are not legally allowed to offer prepaid (stored valued) cards or vouchers to Singapore residents or to market their services to customers in the country;
- SVF businesses managed from outside Singapore may be subject to additional regulations in the countries where the directors live and / or where the business customers are based. We strongly recommend our Clients to inform themselves about this;
- Prepaid (stored value) cards are not equivalent to credit cards, debit cards and ATM cards, and should not be marketed as such;
- Unlike banks and other financial institutions, customers of an SVF will never benefit from a Government guarantee, if the stored value card providers go under and they lose their stored e-money. However, widely accepted SVFs (WASVF) / multipurpose stored value facility (MPSVF) in Singapore usually appoint a bank to guarantee the total outstanding stored value.
- E-money issuance services providers are prohibited from lending money to customers, using customer money or any interest earned on customer money, to finance any activity of any business carried on by the licensee; or offering cash withdrawals in Singapore dollars from payment accounts storing e-money held by Singapore residents.
Conclusion
Healy Consultants Group is the expert at SVF business set up in every country on the planet. Let us know if you require Healy Consultants Group’s assistance to benefit from Singapore’s payment services to achieve your desired business goals.
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