Singapore is to undertake a review of the city state’s digital wallet payment caps during 2021.
The review was confirmed as Singapore and the UK signed a free trade agreement (FTA) and announced their intention to start negotiations for a bi-lateral digital economy agreement (DEA) in the spring.
Under Singapore’s payment services act, which came into force in January, e-wallet users can hold no more than S$5,000 (or its foreign currency equivalent – about US$ 3,700 / £2,790) in their accounts; nor are they allowed to transact more than S$30,000 (or its foreign currency equivalent) during a 12-month period.
Singapore’s minister for trade and industry, Chan Chun Sing, and his UK counterpart, Liz Truss, jointly signed the FTA on 10 December. ‘The deal… secures benefits for UK fintech firms in Singapore, [which] has agreed to start a review in 2021 to consider an increase in the limits imposed on e-wallet payments, which affect UK firms operating in Singapore,’ the UK government said.
The news has been welcomed by London-headquartered fintech companies that provide e-wallets.
James Shanahan, chief executive of Revolut Singapore, told Global Government Fintech: “The limits imposed on e-wallet payments affect a number of UK firms, including Revolut. If and when these limits are increased, customers will be able to use their Revolut accounts to manage more of their money and in more areas of their financial lives.”
Review ‘as payment landscape evolves’
The Monetary Authority of Singapore (MAS) said that e-wallet limits had been set for financial stability reasons and “calibrated after an extensive public consultation over the two years before the payment services act came into force”.
“As stated in the second reading of the payment services bill, these e-wallet limits may be reviewed over time, as Singapore’s financial system and payment landscape evolves. In this regard, the review commencing in 2021 is a planned review. Any changes to these limits would apply consistently to all e-wallets operated by major payment institutions,” a MAS spokesperson told Global Government Fintech.
“In support of financial services and trade and investment of UK firms here, MAS will consider industry’s views, including those of UK firms, on the e-wallet limits. In undertaking this review, MAS’ policy objectives of ensuring continued financial stability and consumer protection remain unchanged,” the MAS spokesperson added.
‘Prudent approach’ to digital wholesale banks
The UK’s FTA announcement goes on to say that Singapore had also agreed to ‘discuss opportunities for UK firms to apply to become digital wholesale banks [DWB] in Singapore’.
MAS announced its digital bank framework, which aims to enable non-banks to offer digital banking services, in 2019, with DWBs defined as focusing on serving small- and medium-sized enterprises and other non-retail segments. MAS earlier this month issued two DWB licences to Chinese ‘big tech’ Ant Group, and a consortium of three financial firms.
“DWBs are introduced as a pilot and MAS will review whether to grant more of such licences in the future. In the immediate term, MAS is taking a prudent approach and will focus on ensuring that the new digital banks are on track to commence operations within about a year of MAS’s approval,” a MAS spokesperson told Global Government Fintech. “Should MAS decide to grant more banking licences to DWBs in the future, MAS welcomes all firms, including UK firms, to apply to be DWBs. In this regard, the UK-Singapore FTA provides for Singapore and UK to discuss UK firms’ interest in becoming DWBs, but does not oblige MAS to award DWB licences to UK firms.”
In respect of the proposed digital economy agreement, Singapore’s Ministry of Trade and Industry said the two sides had agreed to ‘start scoping the modules of a DEA, with a view to launching negotiations in 2021.’
The Singapore-UK FTA largely mirrors an existing deal between Singapore and the European Union, which the UK left almost a year ago. The UK’s ‘Brexit’ transition period is due to expire on 31 December.
‘Global Fintech Hackcelerator’ winners named
MAS has just finished hosting the annual Singapore Fintech Festival (SFF), which ran from 7 to 11 December.
The event saw the winners declared of the 2020 ‘Global Fintech Hackcelerator’. This year the finalists were asked to develop innovations that seek to drive social and environmental impact within the financial sector in response to Covid-19 and climate change.
Three winning teams were selected after a demo day, which saw them pitch their innovations to an industry panel. The teams, which each took home S$50,000 (about US$37,000 or £27,800), were: Matter (Denmark), with solution ‘Matter Analytics’; UK-based RegulAItion Ltd, with solution ‘AIR Platform’; and Hong Kong-based Intensel Ltd, with solution ‘Advanced Physical Climate Risk Analytics’.
During the festival the UK’s Department for International Trade (DIT) kicked off a campaign entitled the ‘Leading Edge Global Partnerships Programme’ to encourage international financial institutions in ‘priority overseas markets’ including Singapore to invest in British fintech.