Statute Details
- Title: Payment Services (Exemption for Specified Period) Regulations 2019
- Act Code: PSA2019-RG1
- Type: Subsidiary legislation (SL)
- Commencement Date: 28 January 2020
- Current Version: 2025 Revised Edition (17 December 2025), status shown as current as at 27 March 2026
- Authorising Act: Payment Services Act 2019 (reference shown in the legislation interface)
- Purpose (high level): Provides time-limited transitional exemptions from licensing requirements under the Payment Services Act 2019 for certain payment service businesses operating immediately before 28 January 2020
- Key Provisions: Regulation 2 (definition), Regulations 3–7 (exemptions for specified categories of payment services), including transitional notice requirements and “cessation” triggers upon licensing applications
What Is This Legislation About?
The Payment Services (Exemption for Specified Period) Regulations 2019 (“Exemption Regulations”) are transitional rules made under the Payment Services Act 2019 (“PSA”). In plain language, they allow certain businesses that were already operating before 28 January 2020 to continue providing particular payment services without immediately complying with specified licensing obligations under the PSA.
The exemptions are not permanent. They are designed to bridge the period between the PSA’s regulatory framework coming into force and the time needed for existing operators to apply for licences (or to adjust their regulatory status). The Regulations therefore focus on (i) who qualifies, (ii) what services are covered, (iii) how long the exemption lasts, and (iv) what steps the operator must take to obtain and maintain the exemption.
Practically, the Regulations are most relevant to payment service providers that were already in the market at the PSA’s commencement date. For lawyers advising such providers, the key question is whether the business falls within one of the exemption categories and whether the provider complied with the notice requirements within the prescribed window after 28 January 2020. The Regulations also address what happens if the provider later applies for a licence or varies an existing licence during the exemption period.
What Are the Key Provisions?
1. Definition and the notice mechanism (Regulation 2)
Regulation 2 defines “Authority’s Internet website” as the MAS website (https://www.mas.gov.sg). This matters because the exemptions require the operator to notify the Monetary Authority of Singapore (“MAS”) in the “form and manner specified” on that website. For practitioners, this is a reminder that compliance is not merely about sending a letter; it is about following MAS’s specified process.
2. Transitional exemption for account issuance services (Regulation 3)
Regulation 3(1) provides that a person who, immediately before 28 January 2020, carried on a business of providing an “account issuance service” is exempt from certain PSA provisions (notably sections 5(1) and 6(4) and (5) of the PSA) “until the expiry of the 12-month period immediately after” 28 January 2020, if the person notified MAS within 30 days after 28 January 2020 of the date the business commenced.
The exemption is therefore conditional on two elements: (a) the business must have been operating immediately before the commencement date, and (b) the operator must have made a timely notification within 30 days. The notification is tied to the commencement date of the business, suggesting MAS wants to verify the “existing operator” status.
3. Transitional exemption for specified payment services (Regulation 4)
Regulation 4 mirrors the structure of Regulation 3. It covers a person who, immediately before 28 January 2020, carried on a business of providing a “specified payment service” and grants an exemption from the same PSA provisions for the same 12-month period, subject to timely notification within 30 days after 28 January 2020.
Regulation 4(3) defines “specified payment service” to include:
(a) a domestic money transfer service; and
(b) a merchant acquisition service.
For legal advisers, this definition is crucial because it determines whether a provider’s business model fits within the exemption. “Merchant acquisition” in particular may involve complex commercial arrangements, so classification analysis is often required.
4. Transitional exemption for cross-border money transfer services (Regulation 5)
Regulation 5 provides a more tailored exemption for cross-border money transfer service providers. It applies to a person (subject to exclusions referencing sections 122 and 123 of the PSA) who was already carrying on such a business immediately before 28 January 2020. The exemption lasts for 12 months after 28 January 2020, but only if two conditions are met:
- Scope limitation: the person carries on the business only in respect of receiving money from outside Singapore for, or arranging for the receipt of money from outside Singapore by, a person in Singapore.
- Timely notification: the person notifies MAS within 30 days after 28 January 2020 of the date the business commenced.
This “receiving/arranging for receipt” limitation is a significant compliance point. It suggests that the exemption is intended for a narrower subset of cross-border activity—likely those that do not involve the full range of cross-border transfer functions that would otherwise trigger licensing requirements. Lawyers should therefore map the provider’s operational flows (where funds originate, where they are received, and how the service is arranged) to ensure the exemption’s scope limitation is satisfied.
5. Transitional exemption for e-money issuance services (Regulation 6)
Regulation 6 grants a transitional exemption for e-money issuance services, but with an additional quantitative threshold. The exemption applies to a person already carrying on the business immediately before 28 January 2020 (again, subject to exclusions referencing PSA sections 122 and 123). The exemption lasts for 12 months after 28 January 2020 if:
- “Relevant money” cap: the relevant money received from, or on account of, all customers at any time does not exceed $30 million (or its equivalent in foreign currency); and
- Timely notification: the person notifies MAS within 30 days after 28 January 2020 of the date the business commenced.
Regulation 6(3) defines “relevant money” by reference to section 23(14) of the PSA, with modifications: references to “major payment institution” are read as references to the person, and references to section 23(2) or (4) are omitted. This is a technical but important drafting feature: it tailors the PSA’s definition to the exemption context. Practitioners should therefore not apply the PSA definition mechanically; they should apply it as modified by the Regulations.
6. Transitional exemption for digital payment token services (Regulation 7)
Regulation 7 provides a shorter transitional exemption for digital payment token services. The exemption lasts for 6 months immediately after 28 January 2020 (rather than 12 months), subject to timely notification within 30 days after 28 January 2020.
Although the extract provided truncates the remainder of Regulation 7, the pattern of the Regulations indicates that the same general structure applies: the exemption is conditional on timely notification and is subject to cessation if the operator applies for a licence or a variation of a licence during the exemption period.
7. Cessation of exemption upon licensing applications (Regulations 3(2), 4(2), 5(2), 6(2), and 7(2))
A consistent feature across the exemption categories is that the exemption ceases if, within the exemption period, the person:
- applies for a licence under section 6(1) of the PSA; or
- being a person deemed to have been granted a major payment institution licence or a money-changing licence under specified PSA provisions, applies to vary its licence under section 7(1)(a) of the PSA to be entitled to carry on the relevant business.
The exemption ceases on the date the application is approved or refused, or if the application is withdrawn, on the date of withdrawal. This is a practical drafting point: it prevents an operator from relying on the transitional exemption while simultaneously moving into the licensing regime, and it clarifies the regulatory “handover” point.
How Is This Legislation Structured?
The Exemption Regulations are structured as a short set of provisions focused on transitional relief. The Regulations contain:
- Regulation 1 (Citation): sets out the short title.
- Regulation 2 (Definition): defines “Authority’s Internet website” for the notification requirement.
- Regulations 3–7 (Exemptions): each regulation corresponds to a category of payment service business and sets out:
- the qualifying condition (business carried on immediately before 28 January 2020);
- the duration of the exemption (12 months for Regulations 3–6; 6 months for Regulation 7);
- the notification requirement (within 30 days after 28 January 2020);
- the scope limitations (notably in Regulation 5 and the $30 million cap in Regulation 6); and
- the cessation triggers upon licensing applications or licence variations.
Who Does This Legislation Apply To?
The Regulations apply to persons who were already operating certain payment service businesses immediately before 28 January 2020. The exemptions are category-specific: account issuance services, specified payment services (domestic money transfer and merchant acquisition), cross-border money transfer services (with a receiving/arranging limitation), e-money issuance services (with a $30 million “relevant money” cap), and digital payment token services.
They also include exclusions for persons mentioned in specified PSA provisions (for example, references to section 122 and 123 of the PSA). These exclusions typically reflect that some entities were already within the licensing or deemed-licensing framework and therefore should not receive the transitional exemption. For legal advisers, the scope analysis should therefore include both the service classification and the entity’s regulatory status under the PSA.
Why Is This Legislation Important?
Although the Exemption Regulations are time-limited, they are legally significant because they determine whether an existing payment service provider could lawfully continue operating without immediate licensing compliance during the transition to the PSA regime. For practitioners, this affects both historical compliance assessments and risk management for ongoing operations.
From an enforcement and compliance perspective, the Regulations are structured around objective triggers: the “immediately before” operating condition, the strict 30-day notification window, and the defined exemption durations. Missing the notification deadline or failing the scope limitations (such as the cross-border receiving limitation or the e-money issuance $30 million cap) could mean the exemption does not apply, exposing the provider to regulatory breach risk.
Finally, the cessation provisions upon licensing applications are important for transaction planning and regulatory strategy. If a provider intends to apply for a licence or vary an existing licence, counsel should consider how and when the exemption ends, and how that interacts with the provider’s operational continuity, representations to counterparties, and internal compliance controls.
Related Legislation
- Payment Services Act 2019 (including sections referenced in the Exemption Regulations: sections 5, 6, 7, 23, 100, 122, and 123)
- Payment Services (Licensing and Conduct of Business) Regulations (if applicable in the MAS regulatory framework for payment services)
- MAS Notices and guidance published on the Authority’s Internet website relevant to notifications and licensing processes
Source Documents
This article provides an overview of the Payment Services (Exemption for Specified Period) Regulations 2019 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.