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By proactively blending the three pillars of regulatory openness, institutional backing, and world-class infrastructure, Singapore has carved out its niche as one of the leading fintech destinations in Asia. The Monetary Authority of Singapore (MAS), the financial regulator, sits at the heart of this ecosystem and is a key catalyst for financial technology innovation. MAS’s fintech strategy is grounded in the principle that innovation and regulation are not mutually opposed forces: good design is the key to enabling innovation while maintaining consumer confidence and financial stability. This is an environment that is challenging but also encouraging to fintech start-ups entering Singapore, where regulations are stringent and grounded in the practical, meaningful needs of consumers and markets.
The most applicable regulatory frameworks for payment-focused fintech companies in Singapore are the Payment Services Act (PS Act), which sets out the licensing scheme for payment service companies, and the MAS regulatory sandbox. This framework offers companies a structured environment in which to test innovative financial services with real customers while operating under relaxed regulatory conditions. The key knowledge any fintech start-up needs is understanding both the frameworks, how they interact, and how to transition between them.
The two main regulatory channels for fintech startups to transition from concept to licensed payment or financial technology businesses in Singapore are the regulatory sandbox and the PS Act. The sandbox pathway is meant for businesses whose services will be truly novel: where there is no clear coverage of existing regulations, where it would be disproportionately onerous for the business to adhere to existing regulations before it has been proven in practice, and where MAS is confident that the services can be provided safely without going through full regulatory compliance. The PS Act pathway refers to the full-scale licensing pathway that follows validation of a business, either through sandbox testing or through the applicant’s own assessment that sandbox testing is not necessary, and when the business is prepared to operate at a commercial scale.
The understanding of both pathways is important for startups for several reasons: the selection between the two pathways and the quality of the selection have a direct impact on the time it takes for the business to enter the market, the cost of complying with the regulations, the commercial credibility of the business, and the firm’s long-term regulatory standing with MAS. A start-up that incorrectly applies for a licence when it is more suitable for a sandbox application, or makes a sandbox application when it is more suitable to apply for a licence, wastes regulatory resources, delays market entry and sets up a suboptimal relationship with MAS. This pathway determination guide supplies the essential information to make this pathway determination early and accurately.
The role of MAS extends beyond traditional financial regulation and is uniquely proactive in Singapore’s fintech ecosystem. MAS’s Fintech and Innovation Group (FTIG) develops and oversees the regulatory regimes that shape the operating environment for fintech companies, including the sandbox and the PS Act. MAS’s support for fintech innovation also goes beyond the design of the regulatory framework, as MAS has a fintech research and development initiative, comprising grant programmes, co-organises industry events such as the annual Singapore FinTech Festival (SFF) — the world’s largest fintech festival — and has a dedicated fintech regulatory enquiry service where fintech startups may approach MAS for informal advice on regulatory queries before applying to formal applications.
MAS has a pragmatic approach to fintech innovation, which is based on the following: (a) that the barriers to entry for new business models should mirror their actual risk level and not be based on assumptions of risk based on a traditional business model; (b) that fintech should be assessed on its real risk profile and not the risk profile of a traditional business model, and (c) that the most effective regulatory outcomes come from the regulatory approach which is genuinely collaborative, rather than enforcement-based. One of the most crucial mindset shifts for fintech startups dealing with MAS for the first time is to view MAS as a partner in building a safe and innovative financial system, rather than a hurdle to overcome.
The structural strengths, forward-looking government policies and history of excellence in regulation have established Singapore as a global fintech hub.
Singapore, a geographic and commercial hub in the developed Southeast Asia region of more than 660 million people, is home to some of the world’s fastest-growing consumer payment markets, with significant gaps in financial inclusion, all from a single regulated base. Singapore’s location and proximity to major Asian markets, along with its direct links to global financial networks, make it a strategic hub.
The credibility and integrity of MAS as a financial regulator can be an important business asset for Singapore-based fintech companies. MAS is consistently cited as a critical factor by international institutional investors, banking partners, and enterprise customers, helping them trust and engage with fintechs licensed by MAS. A MAS licence or sandbox approval indicates a level of regulatory scrutiny that is not necessarily achievable by less rigorous regulators.
Singapore has been a major investor in the digital infrastructure that fintech companies rely on, such as PayNow, the country’s real-time payment system; SGFinDex, the national data exchange infrastructure; and the Singapore Financial Data Exchange (SGX), the financial institutions’ real-time data exchange, which enables the secure sharing of data. This infrastructure will be available directly to MAS-licensed payment service providers, offering fintech startups instant access to the payment infrastructure they need to provide competitive consumer payment products.
Singapore’s pool of talent in the financial space, its status as the regional headquarters of multinational financial institutions, and its well-developed venture capital and private equity ecosystem ensure that fintech startups have access to investment funds, seasoned management expertise, and institutional relationships to scale a regulated financial services business. In addition, the government will allocate more funds to support qualifying fintech activities through various programmes, such as the MAS Financial Sector Technology and Innovation (FSTI) Scheme.
MAS’s regulatory philosophy for fintech companies rests on the concept of a ‘ratchet’: regulatory requirements should be proportionate to the level of risk the business model poses to MAS, rather than to the theoretical maximum risk it could encounter in a ‘worst case scenario’. It is this proportionality principle that provides the intellectual basis for the regulatory sandbox. This approach enables truly innovative services to be trialled in the real world with real users, but with the least amount of protection to reduce the risk to real users of the new service.
MAS’s risk assessment process considers the following three questions when assessing applications submitted for the sandbox and licence, which help balance the tension between innovation enablement and consumer protection: Does the proposed service present risks to consumers or the financial system that the applicant’s proposed safeguards cannot properly manage? Are those risks proportionate to the consumer benefits that the service will provide the consumer? And would the full regulatory framework be disproportionately onerous relative to those risks? The regulatory outcome for fintech startups – whether sandbox or PS Act licensing – is best determined by those who can demonstrate a clear grasp of the risks their services pose and credible measures to manage them effectively.
The MAS regulatory sandbox in Singapore is a carefully designed approach that enables fintech firms and other financial services innovators to test financial products or services in the real marketplace in a controlled, relaxed environment, over a specified period. MAS’s launch of the sandbox in 2016 was part of its initiative to create a “Smart Financial Centre” and has been updated over the years to address the needs of an increasingly diverse fintech applicant community, including the introduction of Sandbox Express in 2019.
At the heart of the sandbox is the solution to a basic regulatory problem: Many truly innovative financial services cannot be “tested offline” or simulated, as their value proposition and risk profile only manifest when real customers use them in real-world conditions. Conversely, the costs and constraints imposed on the startup to achieve full regulatory compliance before it can conduct this real-world validation are not commensurate with the risk of a limited, tightly monitored pilot. The sandbox addresses this conundrum by enabling live testing in a controlled setting near MAS, where a specific set of regulatory requirements is relaxed to allow the test to proceed. In contrast, a specific set of safeguards is maintained to protect participants.
The main reason the sandbox enables innovation is that it removes a layer of regulatory risk associated with offering a new financial service in the real world. If the sandbox were not in place, a start-up developing a new payment service that intends to work with real customers would be forced to either obtain full PS Act licensing — a process that takes time and resources that are unavailable during the early stages of a start-up’s development — or have to engage in unlicensed regulated activities, which is punishable by criminal liability. The sandbox offers a legitimate third alternative: a structured and MAS-supervised testing ground in which the startup can test its business model and technology with real customers, without having to meet the full regulatory requirements of a licensed entity, with testing conditions agreed in advance with MAS.
The innovation-enabling effect in the sandbox is multifaceted. It eliminates the risk to regulators of live testing new services at the individual company level, which would otherwise preclude such testing for early-stage companies. At the ecosystem level, it establishes a pool of fintech companies under MAS supervision, through which innovations can be fed into the regulatory policy development process, providing MAS with first-hand feedback on how new financial services work, the risks they pose, and how to manage them. On the international stage, it plays its part in Singapore’s image as a jurisdiction conducive to responsible financial innovation and attracting fintech talent, capital, and business development to Singapore.
The sandbox applies to specific kinds of fintech businesses; it is intended for businesses that do not have activities that can be adequately tested without engaging real customers, and for businesses whose proposed activities would otherwise be barred by existing regulations.
For startups creating truly innovative payment technologies, such as a new real-time payment settlement system, blockchain-based payment rails, or AI payment authentication systems, that don’t fit into either current regulatory classification or fill gaps between them, sandbox testing is an ideal opportunity. The sandbox enables companies to test their technology with “real” transaction volume before the regulations for the new technology are finalised.
Financial service companies seeking to incorporate financial services or products into financial platforms or marketplaces, such as payments, lending, or insurance, may benefit from the sandbox to experiment with the regulatory line between financial platform activities and regulated financial services. This boundary can be explored and clarified in the sandbox, within a controlled environment, using the given business model.
The sandbox will be available for companies to trial their services in the digital payment token sector, such as new DPT exchange models, DPT-fiat conversion platforms, or DPT custody solutions, in a relaxed regulatory environment until MAS decides on the regulatory framework for such services. Through the PS Act, MAS has continued to develop its regulatory framework for DPT, drawing on observations from the sandboxes.
Startups that are working on novel money transfer solutions, such as those involving new payment rails, correspondent banking substitutes or distributed ledger technology to lower the cost or enhance the speed of international remittances, might be appropriate for inclusion in the sandbox if their technology necessitates real transaction testing to confirm its risk profile and ability to meet AML/CFT obligations.
Participating in the Sandbox offers fintech startups tangible advantages beyond the regulatory flexibility to operate under relaxed conditions during the Sandbox period.
The sandbox is a period of specific activity explicitly approved by the MAS, giving participants regulatory certainty. In contrast, the activities are conducted during the sandbox period and do not trigger enforcement action for unlicensed activity. This certainty is of commercial value — it means that sandbox participants can be confident that MAS fully approves the commercial activity, and that they can approach their banking partners, technology providers and early customers with that confidence.
The sandbox relationship enables a startup to have face-to-face meetings with MAS supervisors who are well-versed in the company’s business, technology, and risk profile. This supervisory familiarity established during the sandbox application process and maintained throughout the sandbox test will help create a supervisory relationship that continues upon leaving the sandbox and becoming a fully licensed company.
When it reaches the stage of being approved for sandbox testing, it’s a strong sign of market confidence in the startup and its business concept, and that the financial authority, MAS, has seen fit to assess and approve it for live testing. The signal really boosts the startup’s credibility in discussions with institutional counterparties that may not want to deal with a fintech company that is already licensed.
The sandbox testing period offers startups valuable real-world operating experience, such as engaging with customers, processing transactions, handling AML/CFT cases, and obtaining technology performance metrics, thereby enhancing the quality of their subsequent PS Act licence application. Sandboxed startups are more likely to have better applications than cold applications and are better positioned to navigate the MAS review process efficiently.
Standard Sandbox Framework is MAS’s first and most flexible path for regulated sandboxes, for fintech businesses with innovative business models that need individual, negotiated regulatory sandboxes tailored to their specific context. Under the standard framework, MAS reviews the specific regulatory requirements that would otherwise apply to the proposed activity; identifies which of these requirements can be relaxed without compromising consumer protection; and sets out bespoke boundary conditions, safeguards, and test parameters for the sandbox’s operation.
The biggest upside of the standard framework is its flexibility and ability to support a much broader spectrum of innovative business models than the more prescriptive Sandbox Express pathway — models that don’t necessarily fit into any of these categories. This flexibility comes at a cost, though, in processing time: the standard mode takes longer to be approved because it involves individual negotiations and assessments of the sandbox conditions. Any business planning process must account for the realistic time required to negotiate and secure approval for sandbox conditions, especially when product launch plans are contingent on the approval date.
In 2019, MAS launched an enhanced, faster, and more streamlined sandbox pathway for fintech business models operating within predetermined activity categories for which MAS has already set out baseline sandbox conditions. Contrary to the conventional framework that calls for an applicant to negotiate with MAS on the conditions for its sandbox, the Sandbox Express applicants benefit from pre-approved sandbox templates, which are built on the most frequently requested sandbox activities, containing the most common regulatory relaxations and safeguards for each category and can be negotiated with MAS without the need for doing so.
The Sandbox Express approval process is expected to be much quicker than the MAS’ standard framework process, with an application considered under Sandbox Express taking no more than 21 days from receipt of a complete application. This headstart is attractive to fintech startups with business models in the prescribed activity categories, who are not seeking specific regulatory treatment but are happy to operate within the prescribed conditions. At the moment, Sandbox Express is offered for a limited range of activity types, such as insurance brokerage, recognised market operator activities, and some payment service activities.
Deciding between the Standard Sandbox and Sandbox Express involves understanding the startup’s business model, time-sensitive requirements, and flexibility preferences. There are several key differences between the two pathways.
Table 1: Standard Sandbox vs Sandbox Express — Key Differences
Prospective sandbox applicants should consider both of the sandbox options and seek informal advice from MAS’s FinTech and Innovation Group (FTIG) via its dedicated enquiry service. FTIG recommends that startups involve it early in the regulatory planning process to determine whether any of the Sandbox Express categories cover the activity they propose and to seek early feedback on the likely scope of the sandbox’s typical conditions under the standard framework.
The best type of sandbox for a specific start-up will vary depending on the novelty of its business model, the need for a tight timeframe, and the flexibility of regulatory requirements during the ‘testing phase’.
When the activity the Startup intends to conduct either falls into one of the categories listed in MAS’s Sandbox Express or is compatible with the standard conditions for that category, the Startup will almost always find it beneficial to use Sandbox Express. The much more streamlined process (21 business days versus weeks or months) provides a real competitive edge, especially for startups vying to be first to market in fast-changing fintech environments.
The standard framework is the right course of action if the activity of the startup is truly novel, that is, it is outside of the scope of existing categories of activities regulated by MAS or falls under a regulatory regime that can only be tailored in a manner that is not provided by a standard Sandbox Express template. If a new business model is placed in a Sandbox Express template that is not tailored to it, it will not receive adequate regulatory treatment. It could be subject to regulatory risk during the Sandbox period.
Not all fintech businesses are required to operate in a ‘sandbox’; either because their intended activities are already well-defined within the law and they just need to apply for the relevant licence, or because of the way they have designed their services, they do not carry out activities that are subject to financial regulation and so do not need to be regulated. The best way to determine whether a sandbox is necessary for a particular business model is to use MAS’s FTIG service before applying for a sandbox.
Some start-ups take a hybrid approach: they test certain parts of their services in the sandbox that have regulatory uncertainty, while at the same time (parallel) preparing their PS Act licence application for the parts of their service that are clearly regulated. With this parallel method, the overall time to full commercial operation can be reduced by skipping sequential application processes when parallel processing is possible.
MAS’s sandbox is intended for truly innovative financial services, rather than merely new products for the applicant that are already regulated or widely available in Singapore. The innovation threshold is therefore the first and most basic eligibility requirement. If the applicant cannot explain specifically how their proposed service is innovative (rather than merely describing new technology), they are unlikely to meet MAS’s eligibility criteria.
Innovation, in the context of the sandbox, refers to a new financial service that does not currently exist in Singapore, or that is not regulated under existing MAS rules or frameworks. MAS evaluates the degree of innovation not just on the technology employed but also on the service outcome: a service that employs very sophisticated technology to deliver a conventional financial service already widely available in Singapore will generally not meet the criterion for innovation. In contrast, a service that employs more conventional means to deliver a truly new consumer outcome – for example, real-time cross-border payments to a previously unserved remittance corridor – may well meet the criterion for innovation. Applicants must succinctly present their case for innovation in their sandbox application and explain how their service differs from the regulated services already available.
MAS is looking for sandbox applicants who have a sound grasp of the risks that their proposed service poses to participants in the sandbox test and to the financial system as a whole, and who have viable, proportionate protective measures to address these risks effectively.
The sandbox application should identify all material risks that the proposed service poses to the consumer(s) involved in the test, such as financial loss, loss of data privacy, and the risk that the service will not be as described in the product disclosure. MAS does not expect this risk identification to be generic; rather, it should be based on the specific operating mechanisms of the proposed service.
For each consumer risk identified, the application must include specific mitigation measures for that risk, such as transaction limits, fund safeguarding arrangements, real-time monitoring systems, or customer complaint procedures, that are clearly proportionate to the level of risk and do not generate new risks as a result of their implementation. MAS will evaluate the proposed mitigation measures to address identified risks and may mandate improvements before approving the sandbox.
MAS will review the systemic risk implications of the service and may impose further safeguards or boundary limits aimed at limiting systemic risk exposure during the test period, if relevant, where the proposed service is likely to have systemic risk implications, for instance, if it involves a brand new payment settlement mechanism that could generate new settlement risks across many counterparties.
The applicants will have to propose a framework to monitor risks during the sandbox period, enabling them to identify and respond to new risks immediately rather than after they have materialised. MAS will require sandbox participants to submit material risk events for the test period and to have in place their own escalation procedures that communicate their approach to, or crossing of, boundaries to MAS as soon as possible.
Consumer protections are an essential part of any type of sandbox application. If the service proposed by the sandbox is innovative and commercially interesting, MAS will not approve it unless it is accompanied by sufficient measures to protect the consumers who will use it during the test. Each service type and risk profile will have its own required safeguards, but there are some minimum safeguards for all sandbox approvals.
Every consumer who participates in the test must be advised that he or she is involved in a real test of an innovative service under the supervision of MAS, that the service is not yet fully licensed, and that the consumer is free to withdraw from the test at any time. This disclosure must be made in plain language before any consumer is onboarded to the sandbox test.
Many sandbox approvals have a transaction level and/or aggregate exposure limit that caps the amount of money any one consumer can lose if the service goes down during the test period. These limits are agreed upon with MAS for the sandbox application and tailored to the nature of the proposed service.
In the event of a failure in the sandbox service, the participant is required to have, in place before the start of the test, documented customer complaint procedures and a clearly defined process for providing redress to the customer whose loss or harm resulted. These procedures must be in place on day one of the sandbox test, not only formulated after a complaint is received.
In the sandbox, MAS will not ease the underlying AML/CFT requirements of financial services, such as customer ID verification, suspicious transaction reporting and monitoring transactions. The AML/CFT controls for the proposed activity to be offered in the Sandbox must be proportionate to the activity’s risk level and comply with the minimum AML/CFT controls prescribed in MAS Notice PSN01 or the relevant AML/CFT notice for the activity type.
A credible exit and transition plan is an essential element of every sandbox application and will be considered by MAS as part of its evaluation of the sandbox application’s readiness.
The duration of the proposed test period must be specified, along with the criteria (milestones) used to determine whether the test is successful, and the metrics and data to be gathered during the test to inform the transition assessment. MAS hopes the test design will be robust enough to provide sufficient information to make an informed decision on whether the service is ready for full licensing.
The exit plan should define the regulatory steps the applicant will take upon completion of the sandbox test, including the MAS licence(s) to apply for, the capital structure to be implemented, and a realistic timeline for the MAS licence application process. MAS uses the exit plan to determine if there is a viable path towards full regulated operation.
The exit plan needs to cover how consumers who have been onboarded during the sandbox test will be moved either to the fully licensed service or, if the sandbox test is not successful, to other service providers and/or to the return of the money held on their behalf. No sandbox will be approved by MAS if there is no clear wind-down process and a consumer fund protection scheme in place for such a case.
The exit plan shall also outline the frequency and reporting format of the sandbox participant when making regular progress reports to MAS against the defined milestones, reporting of material risk events or breaches of boundary conditions during the test period and a structured pre-exit assessment process that MAS will follow to determine if the transition to full licensing is appropriate.
The Payment Services Act Singapore framework is Singapore’s biggest overhaul of its payment services regulatory architecture in more than 10 years. The PS Act, which took effect on 28 January 2020, merged two existing statutes into a single, consolidated, activity-based licensing framework that covers all aspects of payment services, including traditional remittance and money-changing services, digital wallets, e-money issuance, and digital payment token services. It is based on the concept of activity, which requires regulatory authorisation for each regulated payment service a firm offers; the level of authorisation depends on the firm’s size.
The design principles of the PS Act reflect an intentional effort to future-proof Singapore’s payment services regulatory framework to keep up with the speed of fintech innovation. The PS Act distinguishes between regulated activities based on their function, that is, what they do and what risks they pose, and not on the technology used to provide the services, thus allowing the legislation to adapt to new payment technologies and business models, while they are still to be invented, without any changes to the legislation. The technology-neutral approach is one of the aspects that make Singapore’s MAS payment services framework well-designed and adaptable to Singapore’s fintech start-up environment, where business models change quickly. Regulatory frameworks must be amended whenever new technology is introduced, leading to ongoing compliance uncertainties.
According to the PS Act, there are seven categories of regulated payment services. Before deciding the type of licences required, fintech startups need to evaluate whether their proposed service falls into one of these categories.
Account issuance involves establishing and managing payment accounts, such as digital wallets and stored-value accounts, that customers use to store funds and facilitate payments. If fintech firms allow users to store money in a digital wallet and withdraw it, they are definitely providing account issuance services.
Domestic money transfer services facilitate the transfer of money within Singapore between the payers and payees. Cross-border money transfer includes international remittances and cross-border payments. Both activities are subject to separate regulation under the PS Act and require AML/CFT controls, such as customer due diligence for both the sending and receiving parties.
Merchant acquisition involves processing and settling payment transactions on behalf of merchants or facilitating electronic payments by customers to businesses. Any payment processor, payment facilitator, or acquirer that enables merchant clients to engage in this activity must be licensed under the PS Act.
E-money issuance refers to the creation of electronic monetary value that is deposited into payment accounts or instruments and can be spent by the depositor for goods and services or exchanged for fiat money. Digital payment token services include facilitating exchanges, exchanging digital payment tokens, and buying and selling them, which collectively constitute the majority of activities in the cryptocurrency exchange and DPT custody sectors. There are specific regulatory requirements for both categories, but additional restrictions apply to DPT services, such as retail marketing.
Under the PS Act, there are 2 types of payment institution licences (Standard Payment Institution (SPI) licence and Major Payment Institution (MPI) licence), with the principal distinction between them being the number of payment service transactions that the licensee handles. In addition, the PS Act provides for a money-changing licence for entities that provide traditional foreign currency exchange services. The classification of fintech companies under any specific payment services category is based on the types of regulated payment services the fintech company plans to offer and the expected volume of those services.
Under the PS Act’s licensing framework, which is both activity-based and volume-based, one fintech may require authorisations for various categories of payment services, such as a digital wallet (account issuance) coupled with a peer-to-peer money transfer service (domestic money transfer), which will both be included on a single PS licence. The licence (SPI/MPI) is the overarching regulatory authorisation, the face of which includes specific endorsements for services. The first step of the licence application process is to understand exactly which activities are regulated by the licence in the business model one is using, and what may be incidental to the business model may be deemed regulated and thus included in the licence application.
The PS Act aims to fulfil four main regulatory goals that collectively provide the policy framework in which payment institution licensees operate.
The PS Act is intended to ensure that payment systems and payment service providers operate in ways that help maintain the stability of Singapore’s financial system. The capital requirements, safeguarding obligations, and technology risk management standards that MPI applies to its licence holders meet this objective because large-scale payment systems are among the most systemic activities for the country’s financial stability.
The main objective of the Act is to ensure that consumers who use payment services are protected, in particular by safeguarding consumer funds held by payment institutions, ensuring transparency and simplicity regarding the fees and conditions of the payment services provided, and ensuring that complaints and redress are effective. The scope of consumer protection obligations is tailored to the size of the payment institution: the size of the payment institution’s customer base is reflected in the requirements concerning consumer protection, which are more demanding for MPI holders than for SPI holders.
The PS Act introduces a comprehensive AML/CFT framework that imposes several obligations on all licensed payment institutions, including implementing risk-based customer due diligence, transaction monitoring, and reporting of suspicious transactions. The framework meets FATF recommendations and has been continually improved since the Act came into effect, including the introduction of the Travel Rule for transfers of digital payment tokens.
The objective of the Act is to foster public confidence in the payment services industry by promoting the establishment and regulation of licensed payment service providers that are compliant, maintain appropriate levels of capital, and adhere to good governance practices. This confidence-building objective is based on the understanding that the success of Singapore’s digital economy vision depends heavily on consumers’ trust that their money and data are secure when using digital payment services.
The Standard Payment Institution (SPI) licence is the basic payment institution licence under the PS Act for payment service providers whose monthly transaction volume does not exceed the prescribed limits. In its early operating phase, the SPI is suitable for fintech start-ups seeking regulatory authorisation to offer pre-regulated payment services, as they carry lower systemic risk due to their smaller scale. The SPI licence has fewer compliance requirements than the MPI — for example, there is no user fund safeguarding requirement or a security deposit requirement — and is therefore a commercially viable option for firms that do not yet have the capital base or operational infrastructure to comply with the full MPI standard.
SPI holders are not allowed to transact more than S$3 million on average per month for any single regulated payment service (excluding e-money issuance and money changing) or S$6 million in total over a rolling 12-month period for all regulated payment services. The total amount of outstanding e-money cannot exceed S$5 million at any given time. For a fintech startup that is highly confident its transaction volume will remain below these levels in its first few years of business (or that wishes to have a regulatory trigger to drive its licensing process), it may wish to take the SPI as its first step. But they need to incorporate transaction volume monitoring and licence variation planning into their business model from the get-go.
The full licence, known as the Major Payment Institution (MPI) licence, applies to payment service providers whose activity exceeds the SPI transaction thresholds or who wish to operate without the volume limits imposed on payment service providers holding an SPI licence. The full complement of PS Act compliance conditions applies, including a minimum paid-up capital of S$250,000; a security deposit of between S$100,000 and S$200,000, to be held in a special account; safeguarding of user funds; and an independent annual audit. The MPI is the regulatory destination, not the starting point. For a fintech startup aiming to enter the large-scale consumer payment market, it’s the type of licence to think in terms of from the beginning, even if the first operations take place under the SPI licence.
This is driven by the increased systemic significance and consumer protection issues of large-scale payment operations, which is why the MPI’s compliance requirements have been tightened. An MPI with $100 million of user funds has a material interest in protecting those funds. If it cannot, there is a material risk that consumers will suffer, compared to a processing SPI of S$2 million per month. The user fund safeguarding requirement in the MPI framework, which calls for user funds to be kept separately in accounts with MAS-approved financial institutions, is the most operationally impactful of the additional requirements for fintech startups switching to MPI status. This need affects the startup’s treasury management, banking, and reconciliation processes.
One of the most critical decisions a fintech startup must make regarding licensing is whether to pursue specialised licensing (SPI) or master licensing (MPI). When it comes to licensing, one of the most important regulatory choices for a fintech startup is whether to use specialised licensing (SPI) or master licensing (MPI), which will directly impact compliance costs, operational capacity, and growth path.
Table 2: SPI vs MPI — Key Regulatory Differences for Fintech Startups
The SPI is not meant to be a permanent regulatory classification; it is a process by which fintech startups can gain access to regulatory relief during their initial operating period, provided their transaction counts remain within the SPI limits. For companies whose business plans indicate SPI threshold breaches in the next 18 months, it may be more strategic to apply for an MPI licence rather than undergo a mid-operation licence variation. The MAS’s 120-business-day processing time for MPI applications necessitates starting MPI planning more than a year before reaching the SPI thresholds.
Knowing which PS Act licence you’ll need for a typical fintech business model can help your startup make quicker, more informed licensing decisions early in the regulatory planning process.
Table 3: Common Fintech Business Models and Likely Licence Requirements
The map above is merely illustrative and must not be used as a substitute for a specific regulatory assessment of the business model that the startup intends to pursue. Business models that bring together several regulated payment service categories are often part and parcel of current super-app payment services, could be subject to multiple service-type authorisations on a single licence, and could also be subject to additional compliance requirements based on the mix of services provided. Having access to Singapore fintech legal and compliance assistance at an early stage in the licensing planning process can help identify all necessary authorisations before submitting an application.
All payment institution licensees have the most basic and most consistently implemented AML/CFT compliance obligation. The specific AML/CFT procedures that apply to payment institutions—including customer due diligence, transaction monitoring, reporting of suspicious transactions, record keeping and staff training—are detailed in MAS Notice PSN01 and will apply to all SPI and MPI holders from the date of their issuance, with no exceptions. PSN01 is the main regulatory reference document for fintech startups designing their first compliance programme and should be read in full before making programme design decisions.
The PS Act’s AML/CFT framework is risk-based, meaning the level of risk and the intensity and depth of the controls applied to any specific customer and/or transaction should be proportionate to the money laundering and/or terrorist financing risks identified for that individual customer or transaction. This risk-based approach involves payment institutions first conducting a thorough Money Laundering and Terrorist Financing Risk Assessment of their products, services, customer base, activity areas, distribution channels, and delivery methods, and then designing AML/CFT controls to address the risks identified. The approach taken to AML/CFT is not considered to be meeting the expectations of MAS if the programme is not in line with the actual risk analysis, which is institution-specific. Therefore, it is not considered a generic or template programme. If a programme is not based on a true institution-specific risk analysis, it is not considered to be a generic or template AML/CFT programme. It will therefore lead to adverse findings in MAS’s supervisory reviews.
Customer due diligence is the first line of defence that payment institutions use to identify and verify their customers and determine their AML/CFT risk. The PS Act CDD standards take effect with the first transaction and should be integrated into the startup’s customer-onboarding technologies from the outset.
All individual customers of payment institutions shall be identified using suitable and independent acts of identification documents before the institution provides services to them. This usually includes an eID based on images of government-issued documents and electronic liveness checks for a digital-first fintech firm. MAS has stated that it is willing to accept digital CDD methods that are as reliable as the face-to-face method.
If a payment institution offers services to a corporate customer, it has to identify and verify the identities of the ultimate beneficial owners (the owners or controllers of 25% or more of the company). This is especially significant for cross-border payment providers and DPT providers as corporate customer structures are often complex, and perfecting beneficial ownership verification can be difficult.
In accordance with the requirements of the FATF, suspicious AML/CFT customers shall be subject to enhanced due diligence, which is applied to customers with elevated AML/CFT risks, such as a politically exposed person (PEP), a customer from a country subject to higher AML/CFT risk analysis as identified by the FATF, or a customer whose transactions are inconsistent with the customer profile. This will involve more rigorous identity and source-of-funds checks, senior management approval for the onboarding process, and more regular reviews.
The onboarding process is not a single step but should be continuously monitored by payment institutions and periodically repeated for existing customer profiles. The frequency of periodic reviews should be risk-calibrated – more frequent for higher-risk customers than for lower-risk customers. To ensure they can review customer profiles, fintech startups, in particular, need to design these workflows into their systems from the beginning, rather than adding them after obtaining the license.
Customer fund safeguarding is a compliance requirement only for MPI licence holders; for SPI holders, there is no specific requirement under the PS Act, but there are general duties to manage customer funds responsibly. When a fintech startup is developing towards MPI licensing, the safeguarding requirement is one of the most operationally relevant compliance considerations that it will encounter, impacting banking relationships, treasury systems, and financial reporting.
As part of the PS Act’s safeguarding programme, the MPI holders will be required to keep all user funds in segregated accounts with MAS-approved Singapore banks or other MAS-approved financial institutions, where user funds are defined as the total amount of money owed to customers at any given time. Payment institution’s funds should not be mixed with user funds, and the payment institution should perform daily reconciliations between user fund obligations and the balances of the segregated accounts. Where there is a shortfall (in which the amount due to customers exceeds the amount held in safeguarded accounts), it should be rectified immediately and reported to MAS at the earliest opportunity. Automated reconciliation, then, is a key component of daily operations that must be built into the startup’s financial infrastructure, rather than being an afterthought after the product is launched.
Payment institution licensees that rely exclusively on digital delivery channels are a growing focus of MAS’s technology risk management efforts, particularly regarding security. Security is a key focus of MAS’s technology risk management strategy for payment institutions whose operations rely entirely on digital delivery channels. The detailed expectations for payment institution licensees are set out in the MAS Technology Risk Management (TRM) Guidelines.
MAS expects payment institutions to have payment systems that are highly available and resilient, meaning they can operate within the recovery time objective in the event of a system failure. If a payment platform experiences downtime, it is a failure of customer experience and a regulatory problem as well, especially if customers are unable to access the funds they need for essential payments.
Payment institutions should implement a wide range of cybersecurity controls, including network security, access and data security, vulnerability management, and security monitoring. These controls need to be tested regularly through penetration testing and vulnerability assessments, and any identified vulnerabilities must be addressed within agreed-upon timeframes. Consumers’ payment details must be safeguarded in line with both the TRM guidelines issued by MAS and the Personal Data Protection Act (PDPA).
Cloud technology, payment processing, identity verification, and compliance automation are all areas where most fintech startups rely heavily on third-party technology providers. MAS expects to have done appropriate due diligence on any material technology vendor and to require any vendor under contract to comply with MAS’s TRM standards. Vendor concentration risk – the risk of a single technology failure that could compromise critical payment infrastructure must be identified and managed by diversifying or having contingencies in place to prevent this risk.
Payment institutions are required to document incident response plans, and to report critical technology incidents to MAS within reasonable time limits (usually 1 hour from detection). Fintech startups must have incident workflows ready to go before they go live, when pressure is on, and there is not enough time to set them up on the fly.
The speed and outcome of the regulatory review are the most important factors for both MAS market access applications and PS Act payment institution applications: the quality and completeness of the application package. MAS does not accept lenient applications for startups — the rigour of the assessment is the same as that used to evaluate applications from established financial institutions. Applications that lack the necessary documentation and do not meet their substantive criteria will be returned for further documentation and/or revision, thereby extending the overall timeline by several weeks or months.
A compelling application package requires time, knowledge, and attention to detail from the startup’s founding team, legal counsel, compliance consultants, and technology team. The application package for a PS Act licence should include the following: detailed business plan with mapping of each proposed business activity to the type of regulated payment service it is; an AML/CFT framework, including risk assessment process, CDD measures, transaction monitoring approach and the STR reporting process; a description of the PS Act’s governance structure (board, management, compliance, internal reporting); capital adequacy calculations and financial projections; a technology risk management framework; and detailed personal declarations for all proposed directors and key management personnel. One of the most frequent reasons for lengthy review periods is due to incomplete or generic applications.
The documentation required for a PS Act licence application is similar to that for a sandbox application, but with key differences that reflect the unique nature and purpose of each.
The business plan should be specific — including details on each aspect of the organisation’s proposed business model, how it fits into the regulated payment service provision categories, and how the proposed service will provide consumer value and manage consumer risk. High-level, aspirational, or business plans that contain speculative market assumptions or projections outside reasonable limits will receive critical analysis from MAS and be assigned longer review periods and further questions regarding the information.
The AML/CFT framework submitted with the application needs to be specific to the Startup’s risk profile, reflecting the actual customer types, geographical exposure, payment services category, and transaction types of the Startup’s business model. MAS reviewers will be able to tell if AML/CFT frameworks are not tailored to the startup’s context, and won’t be deemed sufficient unless they are substantially revised.
All payment service providers and all parties applying for a licence for a payment service must obtain a legal opinion from a law firm that has experience in the PS Act on the nature of the proposed services and products, and determine whether the proposed services and products are regulated payment services under the PS Act. This opinion shall address the regulatory classification of every type of service that the startup plans to provide and shall be prepared by a qualified solicitor admitted in Singapore with genuine expertise in the PS Act.
The application must contain financial projections at least for 24 months of operations, and the company must be able to satisfy its capital adequacy requirements and obligations, such as the capital requirement of S$250,000 as required by the MPI, based on such projections, on an ongoing basis and not just at the time of application. Any projections with unrealistic revenue growth or that omit the true cost of compliance infrastructure will be judged as not credible.
The MAS review process for PS Act licence applications is clear and should be understood by all applicants before submitting their applications. Applications are submitted electronically via the MAS online licensing portal. Initially, the application will be reviewed for completeness; if documents and/or information are missing, it will be returned for completion before substantive review. Once accepted as complete, the application is sent to an MAS supervisory team for a detailed assessment of the business model, governance structures, AML/CFT framework, capital adequacy, and the proposed key personnel’s fit-and-proper status.
MAS can request further information or clarification during the substantive review, which will restart the review period from the date the information or clarification is received. Faster processing times are observed for applicants who respond promptly, completely, and to specific questions posed by MAS. The targeted review period is 60 business days from receipt of a complete SPI application and 120 business days from receipt of an MPI application (but can be significantly extended due to cycles of information requests, especially when the application includes novel or complex business models).
The set of challenges faced by fintech startups seeking to participate in the MAS sandbox or PS Act licences is consistently the same. It is often identifiable in advance and can be addressed proactively without delaying the processing of a fintech application.
The implementation of an AML/CFT framework that fails to meet MAS requirements for specificity, risk calibration, and operational readiness is the most common reason for application delays. Generic or template frameworks have information requests that are always significant, such as significant changes to programmes, necessitating that MAS assess the information before moving forward.
A challenge by MAS is likely to occur in the governance assessment process for startups that propose governance structures that are too thin, such as a single founder who acts as the CEO, director, and compliance officer, and that are not subject to independent governance oversight. MAS will expect licensed payment institutions to have a proper separation of governance, and the application must provide credible evidence of how the governance structure will ensure effective oversight of the compliance function and the overall business.
It is often difficult for applicants to prove that the technology infrastructure required to support PS Act compliance (transaction monitoring systems, customer identity verification platforms, and regulatory reporting) is in place before they apply. MAS anticipates that licensed payment institutions will be compliance-ready on day one of operation, not in the months after approval.
Fintech start-ups that have applied for PS Act licences have not yet lined up the banking services they will require to operate, such as bank accounts to accept customer funds, process payments, and comply with safeguarding regulations that apply to those holding a PS Act licence. The absence of banking relationships indicates an operational readiness risk, so startups should ensure they have banking relationships or are on track to secure them before submitting their licence application.
One of the most important yet often overlooked phases of a fintech startup’s regulatory journey is exiting the regulatory sandbox and moving to full PS Act licensing. The exit from the sandbox is not automatic at the end of the sandbox period. Still, it will only be granted when MAS concludes that the sandbox test has provided sufficient evidence to justify granting full payment institution licences, and that the startup is operating in compliance with the standards set for payment institutions. The “always on” approach to the sandbox, in which the test period is merely a trial without the purpose of developing the compliance environment needed for licensing, is a recipe for poor readiness at the end of the test period.
For a successful sandbox exit, the start-up needs to present evidence gathered during the sandbox test period that shows its service meets the outlined risk profile in its sandbox application, that its proposed consumer protection measures are being implemented effectively, that its AML/CFT controls are working as intended, and that its governance and operational structures are ready for the future compliance requirements of a licensed payment institution. The exit assessment is much more likely to be passed by startups that have enjoyed the sandbox period with actual operational experience, such as conducting AML/CFT case management, managing customer complaints, and dealing with technology incidents, rather than by those with only a commercial trial.
The shift from a sandbox to a full PS Act licence (or from an initial SPI licence to MPI status) also entails a change in the size and complexity of the compliance burden that startups will face. To address this scaling problem, a conscious effort must be made to plan for and invest in compliance infrastructure.
The compliance programme for sandbox operations, which has a smaller customer base, fewer transactions, and a narrower geographic footprint, needs to be systematically expanded to encompass the full scope of licensed operations. It involves improving transaction monitoring capabilities, expanding the due diligence process for new customers, and scaling up the compliance team, including technology, to support a commercial-scale payment operations programme.
As payments scale, so too must the technology and data infrastructure that enables compliance, from enterprise-grade payments monitoring systems to automated regulatory reporting to powerful customer data management platforms, to accommodate the increased volume and complexity of customers. For startups that postponed this investment in technology in the “sandbox,” the transition after the sandbox should be the moment those investments turn into a “must-have.
Building relationships with banking and service providers is also a key area for maturation, scaling operations from the provisional or limited arrangements typically used in a sandbox to the commercial arrangements required by a licensed payment institution operating at scale. This comprises setting up or confirming safeguarding account arrangements for MPI holders, signing up for prime brokerage or settlement arrangements (if applicable), and finalising contracts with technology vendors, including contractual obligations to comply with MAS’ TRM standards.
A compliance calendar and reliable data management processes are required to meet periodic reporting obligations under the Full PS Act, including monthly transaction volume reports, annual regulatory returns, and audited financial statements. It is an important marker of operational maturity to put these reporting processes in place before the licence comes into effect, rather than trying to do so at the last minute when the first reporting deadline arrives.
The governance and compliance requirements of a licensed payment institution are significantly more onerous than during sandbox testing. The transition from sandbox to full licensing is the time when the startup must make substantial investments in the governance and compliance framework that will support its regulatory path in the long run. There is no time limit on this investment: MAS will assess the startup’s governance arrangements as part of the licensing process, and if they are inadequate, the transition from sandbox to licence will be delayed or prevented.
The key governance investments for the sandbox-to-licence transition are: Appointing a MAS-licensed compliance officer with a proven payment services compliance background; Setting up a board with at least one independent director to provide substantive governance oversight on payment services compliance; and Finalising the development of all internal policies mandated by MAS Notice PSN01 and relevant licence conditions to ensure that the board receives regular and substantive information about the company’s regulatory compliance posture. Such governance mechanisms are most useful when established during the sandboxes, rather than left to post-approval operations, as this will help position startups for the licensing assessment and the supervisory relationship with MAS in the long term.
The time from the sandbox to licence is also closely watched by investors and MAS, with both having sets of expectations that are somewhat related to the regulatory journey and the maturity of the startup’s operations.
The time and expense of moving from a fintech sandbox to full licensing are under-estimated by investors in fintech startups. Founders need to proactively provide investors with timeframes for regulatory considerations, such as the time taken by the MAS to review applications under the PS Act or the time that is needed for the company to prepare for operations before filing applications with the MAS, and include these time parameters in investor reporting and in planning funding rounds.
Maintain proactive communication with MAS throughout the sandbox-to-licence transition by providing regular progress updates against the milestones in the sandbox exit process, identifying any developments that may impact the transition timeline, and communicating early with any questions or concerns MAS has regarding the transition plan. Before this point, the relationship with MAS is established through active communication, which will be the foundation of the startup’s regulatory position over the long term.
Startups that have made enterprise customer commitments or product launch announcements requiring them to hold a PS Act licence by a certain date may find themselves in a precarious situation if the MAS review process does not conclude as expected by the startup. In regulated marketplaces, any startup must incorporate realistic regulatory timelines into its commercial commitments and have contingency plans to address delays.
The full licensing also demands the operational team to be prepared to handle a fully licensed payment institution, including all regulatory reporting, AML/CFT case processing and technology incident notification requirements. Staff training on PS Act obligations, tabletop exercises on regulatory scenarios, and testing the operational readiness of all compliance systems before the licence comes into effect, minimises the risk of early compliance failures that, during the critical stage of start-up development, may have serious consequences for its regulatory standing.
The best — and most cost-effective — way for fintech startups to achieve regulatory compliance is to build compliance into the product, rather than add it to a product that was not designed with regulatory considerations in mind. Compliance-by-design means that the product architecture, customer journey, data model, and operational workflows are built to facilitate AML/CFT, safeguarding, reporting, and conduct obligations imposed by the PS Act, not just the primary payment function the product provides.
Compliance-by-design in practice means engaging legal and compliance advisers as early as possible in the product development process — before technology architecture is finalised, before the customer journey is designed, and before the data model is created. Making these changes to a live payment product, whether for AML/CFT obligations, safeguarding requirements, or regulatory reporting capabilities, is far more costly and disruptive than building these capabilities from the ground up. Compliance is a product roadmap item, and startups that have done so consistently deliver higher-quality licence applications, receive faster MAS approval, and have fewer early post-licence compliance failures than those who wait to include it on their product roadmap.
Internal controls are the systems used internally by a payment institution to ensure the effective implementation of the compliance policies. From the start, a fintech startup must establish robust internal controls rather than relying on manual and informal processes that can’t scale, which is one of the biggest investments a startup can make in its long-term regulatory health.
Automated transaction monitoring and customer risk rating systems should be a priority for fintech startups right from the point of PS Act licensing, and as this compliance team’s manual review workload becomes unsustainable. The automated controls are more consistent and scalable; more easily auditable; and generate a transaction monitoring record that MAS expects to see evidence of in supervisory reviews.
In all instances, financial institutions need to maintain adequate separation of duties between the initiation of financial transactions and compliance decisions, even in small teams. A payment institution lacks segregation of duties if the same person makes, authorises, and logs payments in the regulatory compliance system.
The compliance function needs a structured testing and monitoring programme to independently assess the effectiveness of the compliance controls designed by the startup, rather than relying on management’s assurance. The following tests should be conducted: AML/CFT controls, Safeguarding reconciliation process, Regulatory reporting process, and the technology incident notification.
From the outset, it is important to create a culture of documentation within startups: all compliance decisions, outcomes of AML/CFT cases, risk assessments and regulatory communications need to be documented on the spot and in a format that can be retrieved. MAS supervisory reviews are primarily documentation-based, and the quality of a startup’s compliance documentation is a key indicator of its compliance programme.
Most fintech startups do not have in-house regulatory expertise at the outset. Investing in paying for expert legal and compliance support for the fintech startup in Singapore, whether it be by regulatory lawyers who have experience navigating the payment services sector’s regulatory landscape, compliance consultants with MAS licensing experience, or AML/CFT specialists, is among the best return on investment options that are available to a fintech startup starting its journey in the Singapore payment services regulatory landscape. Expenditure on obtaining the right regulatory advice during the planning phase is minimal compared to the cost of resolving regulatory issues after they have manifested as an MAS finding, a licence condition, or an enforcement action.
Having a regulatory lawyer with direct experience in PS Act licensing review the business model for the startup, advise on which licence is applicable and prepare/review the licence application package significantly increases the quality of the application and lowers the chances of the longer application timelines that can result from various mistakes or gaps in the initial application.
An AML/CFT compliance consultant with experience in payment institutions’ AML/CFT compliance can create the startup’s AML/CFT programme, compliance monitoring system and regulatory reporting system in a manner that will be compliant with MAS’s current AML/CFT supervision expectations and not be the bare minimum required by the law to avoid adverse findings in a real MAS AML/CFT inspection exercise.
As technology plays such a pivotal role in fintech payment services operations, hiring a technology compliance expert to audit the fintech startup’s technology architecture against MAS’s TRM Guidelines offers a level of TRM compliance assurance that the compliance function and legal team alone cannot achieve.
The best time to seek external advice is before the business model and product architecture are finalised, when the cost of incorporating regulatory requirements into the product design is at its lowest,t and the ability to change it is greatest. Evaluating a product post-construction without considering its design compliance is a much worse situation for advisers when it comes to creating a compliant, cost-effective product.
The regulatory path for fintech startups does not end with a PS Act licence in Singapore; it marks the start of a long-term partnership with MAS that will influence the startup’s trajectory over the coming years, including its commercial opportunities, operational environment, and reputation. Building up for long-term regulatory growth involves more than just creating a compliance programme – it requires establishing a regulatory relationship that can scale with the business, adapt to regulatory changes, and maintain high-quality regulatory engagement that defines Singapore’s best-regulated payment institutions.
The key elements of long-term regulatory growth planning for a fintech startup are: To establish a compliance team commensurate with the business, with the right headcount, skills, and technology in place as the business grows and becomes more complex; To have a proactive regulatory intelligence programme in place to monitor developments in MAS policy, updates to FATF guidelines, and changes to the PS Act (Payment Services Act); To invest in compliance automation and analytical capabilities to support a proportionate compliance function, which can keep pace with the volume and complexity of payments operations; and To build the direct supervisory relationships with MAS that enable constructive engagement, consistent communication, and compliance performance that is in step with the business — the relationships that underlie a long-term regulated payment services business in Singapore.
This guide has offered a comprehensive overview of Singapore’s fintech regulatory sandbox framework and the PS Act compliance for the startup landscape, covering the basic philosophy of how the regulations are designed, the eligibility, compliance and application guidelines imposed on the framework, as well as best practices to build a sustainable regulated payment services business in Singapore. The following are the most important takeaways:
The decision on the sandbox for direct PS Act licensing and on SPI vs MPI licensing is consequential. It must be based on a careful evaluation of the business model, expected transaction volume, and the startup’s readiness for compliance. If a business opts for the MAS’ FTIG service, along with appropriate expert regulatory advice, before agreeing to a pathway, it will save time and money and free up management time to focus on growing the business.
Compliance-by-design is the most cost-effective way for a fintech startup to become compliant. It is many times more expensive to add AML/CFT controls, protect infrastructure, and report to regulatory agencies for a product built without such features than to build them in from the start. Without a compliance perspective, every product decision will result in technical debt that must be repaid before and potentially after regulatory approval.
The sandbox should be used purposefully to test out the business model, gain real-world compliance operational experience and establish a regulatory evidence base for a successful transition to full licensing. If the sandbox is seen only as a commercial trial, rather than an environment where active work goes into building compliance infrastructure and a regulatory history, the startup will be in poor shape when the time comes for an exit assessment.
MAS is an active, collaborative regulator that encourages proactive engagements with fintech startups, such as the FTIG enquiry service, pre-application consultations and supervisory communications. Compliance with the regulations is not a constraint but a business enabler when start-ups take a proactive approach to building a safe and innovative payment services business, including partnering with MA and reporting the minimum information.
Given how complex Singapore’s payment services regulatory framework is and the stakes of navigating regulatory decisions at such an early stage of a startup’s lifecycle, having professional Singapore fintech licensing guide advisers on the founding team’s support team is a must. One of the biggest investments a fintech startup can make to become a sustainable, regulated company in Singapore is to hire top regulatory lawyers, compliance consultants, and MAS licensing experts at the outset of launching a regulated product or service, and to do so on an ongoing basis.
Singapore’s fintech regulatory environment is tough, yet fair. One of the most stringent regulatory regimes in the world has successfully passed one of the most stringent licensing regimes, by a fintech startup that has completed the MAS’ sandbox and PS Act licensing programs, that their business model is viable, their governance is credible, their compliance programme is effective and that their management team can construct a regulated financial services business that reliably and responsibly meets the needs of consumers. This demonstration has real commercial benefit: it builds investor confidence, it makes banking partners willing to give the business the critical financial infrastructure it needs, it makes enterprise customers more likely to trust the business with payments, and it gives the business the long-term regulatory strength to grow, innovate and do business well in Singapore’s fast-changing fintech landscape.
Whilst the journey from idea to a payment institution license is not impossible, it is possible for fintech founders and startup teams, provided they are prepared, advised by the right individuals, and have the right mindset. The basics of a fintech startup compliance strategy in Singapore will support the business through its first interaction with MAS and throughout its journey as a regulated payment services business in Asia’s most respected financial centre.
