Moving Money In and Out of Singapore: When Transfers Become Regulated
- Eastern Mezzanine
- Apr 18
- 5 min read
Updated: May 7
As a global financial powerhouse, Singapore is a critical conduit connecting economies across Asia and the rest of the world. With so many international businesses operating in Singapore, moving money within and outside the country’s borders is an inevitable reality.
This translates into a perennial demand for local and global payment services, as individuals and businesses will always need to move money. The numbers speak for themselves, too: the payments market has grown exponentially, projected to rise from $716.31 billion in 2024 to $783.02 billion in 2025 at a CAGR of 9.3%. This projection is expected to remain steady and reach $1117.87 billion in 2029.
The market opportunity is definitely there. But before starting a platform or app to facilitate money movements in and out of Singapore, you will need to ensure it is compliant with all relevant regulations stipulated by the Monetary Authority of Singapore (MAS)’s Payment Services Act (PSA).
This article walks you through the requirements and obligations surrounding domestic and international money transfers, clarifying when and how these activities become regulated.
Introducing the Payment Services Act (PSA), the cornerstone of payment regulations
Enacted in 2019, the PSA forms the foundation for payment services legislation in Singapore. Utilising an activity-based framework, the PSA segregates payment services into seven broad categories.
Learn about the PSA’s classifications in our article here: Navigating Singapore’s Payment Services Landscape: A Guide to the Payment Services Act
Depending on the nature of your money movement operations, your money movement business will very likely be classified as a domestic money transfer service and/or a cross-border money transfer service.
Under the PSA, a domestic money transfer service facilitates money transfers from a payer to a payee within Singapore. This includes transfers between different payment accounts or between a payment account and a non-payment account (eg: traditional bank account). Examples of domestic money transfer services include peer-to-peer (P2P) platforms like Mastercard Send and bill payment apps like AXS m-station.
As for cross-border money transfer services, they facilitate the sending or receiving of funds between Singapore and the rest of the world. Sending money to an entity outside of Singapore is known as outbound remittance, while inbound remittance refers to receiving money from outside Singapore. Traditional remittance companies like Western Union and MoneyGram fall under this classification, as do fintech platforms like Thunes, Wise, and Stellar.
Get yourself licensed to facilitate money movements in and out of Singapore
The PSA provides businesses with three main license types: money-changing, Standard Payment Institution (SPI), and Major Payment Institution (MPI).
The money-changing license only applies if you add currency conversion services as part of your cross-border payment solution. As for the SPI and MPI licenses, you will need to get either depending on the scale of your operations.
You will need to apply for an SPI license if your money movement business operates below the following thresholds:
Total value of payment transactions for one payment service in a month: ≤ $3 million
Total value of payment transactions for two or more payment services in a month: ≤ $6 million
Average daily e-money float: ≤ $5 million
Minimum initial and ongoing financial requirements (for Singapore-incorporated businesses): Base capital of at least $100,000
Net head office funds (for foreign businesses): At least $100,000
If your money movement platform operates beyond SPI thresholds, you will require an MPI license. While MAS does not impose restrictions on payment transaction flows or thresholds for MPI holders, you need to meet the following initial and ongoing financial requirements:
Singapore-incorporated MPI: Base capital of at least $250,000
Foreign company: Net head office funds of at least $250,000
You must also maintain a security deposit to protect your customers’ money. Depending on the value of the transactions you facilitate, your minimum security deposit will differ:
Value of transactions is ≤ $6 million: Security deposit of $100,000
Value of transactions is > $6 million: Security deposit of $200,000
Learn more about the PSA’s licensing requirements here: Who’s Licensed, and How: A Breakdown of Payment Services Licences in Singapore
Key obligations to fulfil when your money movement business is licensed
Getting your money movement business licensed is just the first step. Once you have attained your license, there are other key obligations that MAS requires you to fulfil, most of which relate to protecting your customers’ interests and funds. They are as follows:
Set up anti-money laundering (AML) and countering the financing of terrorism (CFT) safeguards
As per Notice PSN01 dated April 2024, MAS places AML/CFT safeguards front and centre, requiring all payment service providers to diligently implement robust policies, procedures, and controls, including thorough Know Your Customer (KYC) and customer due diligence (CDD) processes when onboarding users.
PSN01 is very similar to PSN02 (as summarised in our article on crypto gateways), encompassing the following requirements:
Measure | Requirement |
Risk assessment and risk mitigation | Identify, assess, and understand Money Laundering (ML) and Terrorism Financing (TF) risks. |
Customer due diligence (CDD) | Perform CDD measures to "Know Your Customer" (KYC). |
Reliance on third parties | Payment service providers are allowed to engage eligible third parties to perform elements of the CDD process. |
Correspondent accounts and wire transfers | Address risks associated with cross-border relationships and transactions. |
Record keeping | Maintain adequate records of all relevant data. |
Suspicious transaction reporting (STR) | Implement measures to identify and report suspicious transactions. |
Internal policies, compliance, audit, and training | Establish a robust, AML/CFT-compliant internal framework. |
This is a summary of the Notice PSN01. For full details, please refer to the document on MAS’s website.
Protect your customers’ funds
Now that you have sorted out your AML/CFT measures, the next step is to protect your customers’ funds with safeguarding mechanisms. As your platform holds your customers’ monies while they are in transit, you need to ensure they are sufficiently protected from potential risks.
If you are an MPI licensee, you will need to protect your customers’ funds by deploying:
An undertaking from a bank in Singapore, a merchant bank, or a licensed finance company
A guarantee from a bank in Singapore, a merchant bank, a licensed finance company, or a financial guarantee insurer
A deposit in a trust account held with a bank, merchant bank, or licensed finance company
Safeguarding in other ways as prescribed by MAS
Should you hold an SPI license instead, you are exempt from this obligation as MAS perceives the smaller volume of your payment transactions as posing less risk to your customers’ funds.
Set up technology risk management systems
To complement your AML/CFT and customers’ funds protection measures, you also need to build technology risk management (TRM) and cyber hygiene into your money movement operations. Under MAS’s guidelines, you are expected to make your platform secure, reliable, resilient to data breaches, and maintain service availability. You may do so by implementing strong authentication methods, data encryption, security audits, penetration testing, and incident response plans into your operations.
Conduct your business fairly
Specific to money movement businesses, you need to be transparent in disclosing the fees you charge for each transfer. And if you also provide currency conversion services as part of your cross-border payment solution, you will also need to clearly indicate the exchange rates you use to perform the conversions.
Ease your PSA compliance with Eastern Mezzanine
Managing a money movement business in Singapore—whether domestic or international—can be lucrative, provided that you comply with the demanding regulations laid out by the PSA. And these regulations may not stay static, too: MAS periodically reviews its guidelines and issues changes as needed.
The regulatory situation may be complicated, but it does not have to be. Choose Eastern Mezzanine as your legal partner of choice, and our team of legal counsels will take care of the regulatory legwork for you.
Our team of legal counsels are equipped with deep expertise in payment services, and this includes specific regulations for local and global money movement services. Our dedicated team is here to guide you through the license application process and fulfil all necessary obligations, ensuring your business stays compliant with MAS and the PSA’s regulations.