The Monetary Authority of Singapore (MAS) has published a consultation paper in which it proposes to revise the limits currently imposed on personal payment accounts that contain e‑money (e-wallets) issued by Major Payment Institutions (MPIs). The revisions focus on the caps on personal e-wallets and introduce an exemption to allow for ‘white labelling’ of e-wallet accounts. MAS’s proposals result from its study of the potential impact on financial stability of changes in consumer behaviour, usage and business models over time.
The consultation paper, Proposed Amendments to Restrictions on Personal Payment Accounts that Contain E-Money (P006-2022, 18 October 2022), seeks public comment until 25 November 2022, after which MAS intends to finalise its regulatory approach.
Under the current regulations, the maximum amount of funds a user may have in an e-wallet at any given time is $5,000 (stock cap) and the maximum outflow for a rolling 12-month period is $30,000 (flow cap). The caps are in place to ensure continued stability of the financial system and to reduce the risk of significant outflows from banks' retail deposits to non-bank electronic money.
In response to feedback from the industry and to accommodate certain user demands, exceptions to the flow cap were developed. Users are permitted to add money to their e-wallets throughout the day as long as the balance at the end of the day is $5,000 or less. Money that is transferred to the user's own or designated local bank accounts, or to his or her overseas bank account, is not included in the calculation of the flow cap.
MAS is proposing to raise the stock and flow caps on personal e-wallets in a bid to encourage greater customer convenience and innovation in thee-payments landscape. The stock cap will be raised from $5,000 to $20,000 for new accounts issued by financial institutions and start-ups, and the flow cap will increase from $30,000 up to $100,000 per 12-month period.
MAS acknowledges that raising the caps will increase consumers’ potential losses from scams involving e-wallets. MAS will continue to collaborate closely with the anti-scam sector to make sure they put in place effective anti-scam measures that are appropriate for their risk and business profiles.
Under Section 24(1)(c) of the PS Act, an MPI that issues 2 or more e-wallets to any payment service user must aggregate all the e-money in thee-wallets issued to that payment service user.
MAS proposes to amend the Payment Services Regulations to exempt an MPI in a white-label account issuance arrangement from section 24(1)(c) of the PS Act. This means that the MPI will not be required to aggregate the e-money in e-wallets issued in different white-label arrangements to the same payment service user for the purpose of applying the caps.
MAS’s proposals to increase the stock and flow caps on personal e-wallets will provide greater convenience to users and enable service providers to develop more innovative and higher value services that involve e-wallets.
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Disclaimer: This article is for general information only and does not constitute legal advice.
