MAS Payment Services Act licensing — MPI and SPI — Step-by-step walkthrough
MAS Payment Services Act licensing requires most payment businesses in Singapore to hold either a Standard Payment Institution (SPI) or Major Payment Institution (MPI) licence, depending on transaction volumes. This walkthrough explains the two licence classes, the seven regulated payment activities, the thresholds that separate SPI from MPI, and the capital, timeline and cost in 2026.
What MAS Payment Services Act licensing is
The Payment Services Act 2019 consolidated payments regulation in Singapore into a single activity-based framework administered by the Monetary Authority of Singapore (MAS). It regulates seven activities: account issuance, domestic money transfer, cross-border money transfer, merchant acquisition, e-money issuance, digital payment token services, and money-changing. A business carrying on any of these activities by way of business must be licensed unless an exemption applies.
There are three licence classes: money-changing licence, Standard Payment Institution (SPI) and Major Payment Institution (MPI). Section 5 of the Payment Services Act 2019 establishes the requirement to hold a licence to provide a payment service, and Section 6 sets out the classes.
Who needs an SPI or MPI licence
Fintechs offering wallets, remittance, merchant acquiring or digital payment token services are the core population. The class you need depends on scale rather than activity type. An SPI is appropriate where transaction flows stay below the thresholds; an MPI is required once flows exceed them or where you hold larger float balances.
Eligibility, thresholds and capital
An SPI applies where monthly transactions for any single activity do not exceed S$3 million (or S$6 million across two or more activities) and daily outstanding e-money does not exceed S$5 million. Cross these and an MPI licence is required, with no upper ceiling. Base capital is S$100,000 for an SPI and S$250,000 for an MPI. MPIs must also safeguard customer money through a bank guarantee, trust account or equivalent. At least one executive director must be resident in Singapore and the firm must maintain anti-money-laundering controls aligned to MAS Notices.
Cost and timeline — the numbers
Base capital is S$100,000 (SPI) or S$250,000 (MPI). Application and advisory work commonly runs S$15,000 to S$40,000, with AML/compliance build-out and audit adding more. MAS review typically takes 4 to 6 months for an SPI and 6 to 12 months for an MPI from a complete application. Annual independent audit of the payments business is expected.
Step-by-step licensing walkthrough
Map your activities to the seven regulated categories and project your monthly transaction volumes to determine SPI versus MPI. Incorporate and capitalise the Singapore entity. Appoint a resident executive director and build the AML/CFT framework, including transaction monitoring and a compliance officer. Prepare the business plan, safeguarding arrangements (for MPI) and IT risk documentation, then submit to MAS and engage actively through the review.
Payments firms frequently also run fund or treasury structures; our explainer on VCC redomiciliation is useful where group restructuring is in view, and incoming founders should read nominee director services for foreigners to satisfy the residency requirement. For the related MAS licence often held alongside payments, see our Payment Services Act MPI and SPI walkthrough.
Common mistakes and gotchas
Under-scoping volumes to qualify as an SPI, then breaching thresholds within months, forces an awkward upgrade to MPI. Weak AML frameworks are the single biggest reason applications fail. Firms also underestimate safeguarding obligations for customer float. Verify the current rules on the MAS website and read the Act on Singapore Statutes Online.
The seven regulated payment activities explained
The Payment Services Act 2019 regulates seven activities, and a single business can touch several at once. Account-issuance services involve issuing a payment account that holds funds for transactions. Domestic and cross-border money-transfer services cover remittance within and out of Singapore. Merchant-acquisition services enable merchants to accept and process payments. E-money issuance covers stored-value that represents a claim on the issuer. Digital payment token services cover dealing in or facilitating the exchange of tokens such as cryptocurrencies. Money-changing covers the buying and selling of foreign currency notes. Because the framework is activity-based, the licence you need depends on the combination of activities and the volumes flowing through each.
How thresholds drive the SPI-to-MPI decision
The line between a Standard Payment Institution and a Major Payment Institution is drawn by volume, not by ambition. An SPI must keep monthly transactions for any single payment activity at or below S$3 million, or S$6 million across two or more activities, and must keep daily outstanding e-money at or below S$5 million. Cross any of these and an MPI licence becomes mandatory, with no upper limit. Projecting volumes honestly is essential: a fast-growing fintech that licenses as an SPI may breach within months, forcing a disruptive upgrade. Where rapid growth is expected, applying directly for an MPI avoids that cliff edge even though the review is longer and the safeguarding obligations heavier.
Safeguarding customer money and AML expectations
An MPI must safeguard relevant money received from customers, typically through an undertaking or guarantee from a bank, a trust account, or a comparable arrangement, so that customer funds are protected if the institution fails. This is one of the most scrutinised parts of an MPI application. Equally scrutinised is the anti-money-laundering and counter-financing-of-terrorism framework. MAS expects risk-based customer due diligence, ongoing transaction monitoring, screening against sanctions lists, suspicious-transaction reporting, and a properly resourced compliance officer. Weak AML controls are the single most common reason payment-services applications fail, ahead of capital or technology concerns.
Technology risk management also matters: applicants must show resilient systems, data protection, and incident-response capability proportionate to the scale of payment flows.
Worked cost model and post-licensing obligations
Consider a remittance start-up projecting S$4 million in monthly cross-border transfers. Because that exceeds the S$3 million single-activity ceiling, it needs an MPI with base capital of S$250,000, plus a safeguarding arrangement for customer float, AML build-out, and an annual audit. A realistic first-year cost might be S$250,000 base capital, S$25,000 to S$40,000 in application and legal work, S$30,000 or more to stand up AML and technology controls, and ongoing compliance from S$2,000 to S$5,000 a month. After licensing, the institution must file periodic returns to MAS, undergo annual audit, maintain its safeguarding and AML arrangements, and notify MAS of material changes. The licence is a starting line, not a finish line.
FAQs
What separates an SPI from an MPI?
Transaction thresholds: an SPI stays below S$3 million per month for a single activity (S$6 million across activities) and S$5 million daily e-money. Above those, an MPI is required.
What base capital is needed?
S$100,000 for an SPI and S$250,000 for an MPI, with MPIs also required to safeguard customer money.
How long does an MPI licence take?
Generally 6 to 12 months from a complete application, given the depth of MAS review for larger payment flows.
Do money-changers need this licence?
Money-changing is one of the regulated activities and is covered by a dedicated money-changing licence class under the same Act.
Related guides
Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.