Under the Payment Services Act 2019, a business providing regulated payment services in Singapore needs either a Standard Payment Institution (SPI) or Major Payment Institution (MPI) licence, with the split determined by monthly transaction volume thresholds set out in the Act rather than by the type of payment service alone.
Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.
What MPI and SPI licensing involves
Section 5 of the Payment Services Act 2019 prohibits carrying on a business providing a regulated payment service in Singapore without holding the relevant licence. Section 6(5) of the Act sets the thresholds that separate the two licence tiers: a Standard Payment Institution handles up to S$3 million in monthly transactions for a single regulated activity (or S$6 million across two or more activities), while a Major Payment Institution licence is required once a business exceeds those thresholds, or where the activity involves e-money issuance above S$5 million in daily outstanding float.
Who this affects
This affects fintechs, remittance businesses, digital payment token service providers, e-money issuers and merchant acquirers operating in or from Singapore. Businesses with payment-token exposure inside a fund structure should also review transaction monitoring alert design for a VCC, since AML transaction monitoring obligations under the Payment Services Act and equivalent obligations at the fund level are assessed against similar underlying MAS AML/CFT expectations.
Eligibility and requirements
There are seven regulated payment service activities under the Act: account issuance, domestic money transfer, cross-border money transfer, merchant acquisition, e-money issuance, digital payment token services, and money-changing. An applicant needs a locally incorporated presence, at least one Singapore-resident executive officer, a permanent place of business in Singapore, and AML/CFT policies addressing customer due diligence, transaction monitoring and suspicious transaction reporting appropriate to the specific activities applied for. Fintechs operating across regulated sectors should also see our sector compliance guide covering fintech alongside F&B, healthcare and education for how licensing obligations layer on top of general company compliance.
Cost and timeline
MAS application fees are S$1,000 for an SPI licence and S$1,500 for an MPI licence, both non-refundable, with annual licence fees payable thereafter scaled to the activities and volumes licensed. MAS review typically takes 4 to 6 months from a complete application, though applications covering higher-risk activities such as digital payment token services or cross-border money transfer often take longer due to more intensive AML/CFT scrutiny.
Frequently asked questions
Applicants most often ask whether they can start as an SPI and upgrade later (yes, by applying to vary the licence once volumes approach the threshold), whether one licence covers all seven activities automatically (no, each activity must be specifically applied for and approved), and whether a foreign payment licence from another jurisdiction shortens the Singapore process (it does not remove the need for a full Singapore application, though it can support the fit-and-proper assessment).
Common mistakes and rejection reasons
The most common mistake is applying for an SPI licence while already operating close to or above the S$3 million or S$6 million monthly thresholds, which MAS will flag during review. A second is underestimating the AML/CFT policy detail expected for digital payment token services specifically, which attracts materially more scrutiny than domestic money transfer or merchant acquisition activities. A third is failing to appoint a genuinely Singapore-resident executive officer with real operational authority, rather than a nominal appointment.
Worked example
A cross-border remittance start-up applies for an SPI licence based on its first-year projected volumes of S$2 million a month. By its second year of operation, actual monthly volumes have grown to S$4 million, above the S$3 million single-activity SPI threshold, but the business continues operating under its original SPI licence for several months before its compliance team catches the breach during an internal review. The business then files an MPI licence variation application with MAS, alongside a self-disclosure of the period during which it operated above its licensed threshold, which MAS treats more favourably than if the breach had been discovered through external supervision first.
Regulator references
For the underlying rules referenced above, see MAS, Singapore Statutes Online.
Related guides
For how token-specific licensing interacts with the broader Payment Services Act framework, see our note on MAS Digital Payment Token licensing.
FAQs
What is the transaction volume threshold between SPI and MPI?
S$3 million in monthly transactions for a single regulated activity, or S$6 million across two or more activities; exceeding these requires an MPI licence.
Does e-money issuance have its own separate threshold?
Yes, a S$5 million daily outstanding e-money float threshold applies specifically to e-money issuance, in addition to the general transaction volume tests.
Can a business hold both an SPI and later upgrade to MPI?
Yes, this is done through a licence variation application to MAS once volumes approach or exceed the SPI thresholds, rather than a fresh application from scratch.
Are all seven payment services covered under one application?
No, each regulated activity the business intends to provide must be specifically applied for; a licence does not automatically extend to activities not included in the original application.
Does digital payment token dealing require anything beyond the standard MPI licence?
It is one of the seven regulated activities under the Act and is licensed as part of the MPI or SPI framework, but typically attracts more detailed AML/CFT review given the underlying risk profile.
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.