Company Registration

How to Apply for an MPI License in Singapore: A Complete Guide for Businesses 

Apply for an MPI license under the Payment Services Act (PSA) in Singapore. In this blog, we will guide you about the Monetary Authority of Singapore (MAS) MPI license requirements, eligibility criteria, step-by-step application process, fees, and compliance obligations. 

Introduction 

Singapore is quickly rising among the top fintech destinations in Asia, owing to its innovative-friendly ecosystem and favourable regulatory framework. For payment service providers, it is necessary to register to obtain MPI License in Singapore within this regulatory framework under the Payment Services Act (PSA) Singapore. Getting a company formation in Singapore is crucial before securing a MPI license.  

A Major Payment Institution (MPI) license in Singapore is necessary for firms that undertake high volumes of transactions and provide multiple payment services. The license in Singapore is governed by the Monetary Authority of Singapore (MAS) to ensure adherence with MAS MPI license requirements. 

The MPI license, in contrast to the Standard Payment Institution (SPI) license, enables firms to go above the transaction limits. If you are planning to enter the Singapore payments industry; acquiring an MPI license is a very important consideration. Enterslice can assist you with your MPI Singapore license application process. 

What is an MPI License in Singapore? 

An MPI license in Singapore is issued in accordance with the Payment Services Act (PSA) and is regulated by the Monetary Authority of Singapore (MAS). An MPI license is intended for companies that engage in the provision of large-scale payment solutions or solutions involving multiple payment services. 

Services Allowed under an MPI License 

As per the guidelines provided by MAS, an MPI license allows for numerous types of payment services, such as: 

• International remittances: Transfer of money to a different country. 

• Account-issuing services: issuing wallets or payment accounts. 

• Issuance of e-money: Provision of stored value services. 

• Domestic money transfer: facilitating local money transfer. 

• Digital payment token services: involving services related to cryptocurrencies and tokens. 

• Merchant acquisition: payment processing for merchants. 

MPI vs SPI License 

The Standard Payment Institution (SPI) license is suitable for a small enterprise that processes fewer transactions. However, the scope of services that the Major Payment Institution (MPI) will offer will not be volume restricted. 

• SPI license: The license is for monthly transactions, with a lower e-money ceiling. 

• MPI license: The license is required if they intend to pursue aggressive growth or when businesses exceed such thresholds. 

Thresholds criteria for MPI License 

A license from MAS is required in the following cases: 

• The transaction amount exceeds S$3 million per month across all payment services. 

• Exceeding S$ 5 million for e-money outstanding. 

Why Businesses Choose MPI License in Singapore? 

For ambitious firms, the MPI license offers the potential to grow and operate in compliance in the payments industry in Singapore. Companies adopt an MPI license because of the following reasons: 

• Extended service field: It offers more than one payment service in one license. 

• Scalability: It gives unlimited transaction volume. 

• International credibility: The key is to be recognised as a formally regulated institution within an international fintech hub. 

Eligibility Criteria & Requirements for Applying for an MPI License in Singapore 

Businesses need to meet strict eligibility criteria for obtaining an MPI license in Singapore, dictated by the Monetary Authority of Singapore (MAS) under the Payment Services Act Singapore. The given below eligibility criteria includes a well-structured, financially stable, and more for applying an MPI license in Singapore.  

A. Company structure requirements 

An application for an MPI license must be supported by a proper legal and operational presence in Singapore. The requirements below guarantee that applicants are not shell entities but substance businesses with a local footprint. 

• It is mandatory to incorporate a Singapore company or to register a foreign branch. 

• There should also be a physical office, permanent in nature, in Singapore, staffed during business hours. 

• It is required that the company have a proper governance framework and operational readiness to deliver payment services. 

B. Minimum capital requirements 

The key prerequisite for MPI licensing is financial strength. The requirements below protect against the insolvency risks and maintain stability in the payment’s ecosystem of Singapore. 

• Applicants should possess a base capital of at least S$250,000. 

• MAS expects companies to ensure continuing capital adequacy, or the maintenance of adequate funds in relation to risk exposure. 

• Businesses should make sure they can bear financial robustness for high-volume transactions while prioritising protecting customer funds. 

C. Management and fit & proper requirements 

MAS emphasises credibility in the area of leadership and governance. This, in turn, makes sure that the licensed organisations are run by qualified individuals who are capable of meeting the required standards. 

• At least one of the Executive directors has to be either a Singapore citizen, an employment pass holder or a permanent resident. 

• The directors, as well as shareholders, are required to qualify in the fit & proper test conducted by MAS, which examines integrity, suitability, and financial fitness. 

• The management team should have experience related to compliance, fintech, and/or financial services. 

D. Compliance and risk management 

Well-developed compliance/risk management programs are an absolute requirement for MPI applicants. The actions below benefit customers, stabilise the system, and ensure that Singapore meets international best standards for financial integrity. 

• Companies must adopt Anti-Money Laundering (AML)/Counter-Terrorism Financing (CFT) policies. 

• There should be effective technology risk management systems that will protect online transactions. 

• Applicants are required to submit a legal opinion attesting to their satisfaction with the PSA, as well as an independent auditor’s report attesting to their financial viability. 

• To maintain the MPI license in Singapore, the obligations of compliance monitoring and reporting need to be fulfilled. 

Step-by-Step Application Process for an MPI License in Singapore 

There are several steps in the process of obtaining a Major Payment Institution (MPI) license in Singapore, according to the Payment Services Act Singapore. The following steps must be followed by the business: 

Step 1: Pre-application Preparation 

Internal preparation prior to the formal application process is also to be considered. It also ensures that businesses approach the application process with focus and confidence. 

• Strategy planning: This is where you determine what type of payment service you wish to offer, such as cross-border funds and/or e-money issuance. 

• Legal consultation: Hire a Singapore lawyer to interpret MAS requirements and draw up a plan of action. 

• Documentation roadmap: You must ensure that the required documentation is identified and completed early. 

Step 2: Gathering Required Documents 

MAS requires a full complement of documents in order to determine eligibility, which reduces the need for MAS to request additional clarification later. These include: 

Documents	Purpose	Notes
Business Profile (ACRA)	Proof of incorporation or branch registration	Obligatory for all applicants
Memorandum of Association (MoA) and Articles of Association (AoA)	Explain the corporate purpose and structure	They should be compliant with MAS regulations
Board and Key Management CVs	Display strengths in leadership Competencies	Highlight fintech/compliance experience
Corporate ownership chart	Indicating the shareholding pattern and the ultimate beneficial owners	Facilitates transparency for MAS review
Compliance manual & AML/CFT framework	Describes risk management and anti-money laundering strategies	–
Financial projection & auditing records	Provide financial stability	Includes 3-5 years of forecast
Legal opinion	It confirms that PSA is in compliance with regulations	Issued by the Singapore law firm
Independent Auditor’s assessment	Validating financial integrity	Mandatory (if applicable)

Step 3: Finalising the MAS E- Licensing Application 

Applications must be submitted through the MAS e-licensing portal. 

• Use the Singpass Singaporean secure digital identity system for registration and login. 

• You need to choose the MPI license application form to provide information, such as: 

• Company details and contact information. 

• Payment services are planned to be provided. 

• Cost forecasting and compliance systems. 

• Upload all supporting documents in the required file format. 

Step 4: Submission and fee payment 

After the form is filled out, the companies are required to pay certain fees. 

• Application fees vary between S$1,000 and S$1,500, depending on the payment services chosen. 

• The fees are non-refundable even when an application for license is denied. 

• The payment will be made through the MAS e-licensing portal. 

Step 5: Post-submission review by MAS 

After submitting the form, MAS does an extensive review of the submitted form. This ensures that only legitimate businesses in compliance with MPI regulations obtain an MPI license. 

• Documentation verification: The MAS will examine all submitted documents for accuracy and completeness. 

• Compliance checks: These include reviewing AML/CFT regimes, governance arrangements, and financial sufficiency. 

• Follow-ups: MAS may ask for clarification, more documentation, or interviews with the directors. 

Step 6: Approval and next steps 

If the application is successful, MAS then grants the MPI license in Singapore, giving it a legal business presence.  

1. Approval package, comprising license information and allowed payment services. 

2. Continuous obligations must be met by licensed institutions: 

• Regular reporting requirements. 

• Continuous monitoring for AML/CFT 

• Updates on the risk management of technology 

• License renewals and audits. 

However, the approval of the MAS license is not the end of the journey, as the business has to ensure continued compliance in order to maintain the license. 

MPI License Cost and Timeline 

The MPI license Singapore application has an application fees, timeline, and ongoing compliance. The Monetary Authority of Singapore (MAS) determines fees based on offered payment services in accordance with the Payment Services Act of Singapore. The MPI application process in Singapore also requires payment of an application fee. 

Application fees: 

Payment service category	Application fees (in S$)	Notes
Account Issuance Service	1,000	Covers wallets/payment accounts
Domestic Money Transfer Service	1,000	Local fund transfers
Merchant Acquisition Service	1,000	Payment processing for merchants
E-money Issuance Service	1,000	Stored-value facilities
Digital Payment Token Service	1,500	Token/cryptocurrency services
Cross-border Money Transfer Service	1,500	International remittance services

Compliance Costs: 

In addition to fees associated with applying for services, there are other costs that businesses must factor into their budgets. 

• Base capital requirement is a minimum of S$250,000. 

• Auditor’s fees are an independent assessment of financial soundness. 

• Legal opinion confirmation of PSA Compliance from Singapore lawyers. 

• Ongoing compliance with AML/CFT Regimes, Tech Risk Management, and Reporting Requirements. 

Timeline: 

Usually, it takes between 6 and 8 months to process an application through the MPI, based on the assessment of MAS. Preparation is key to ensuring businesses manage expenses effectively and get approval quickly. 

• Faster approvals: accomplished by having the right documentation, sound compliance processes, and credible governance. 

• Delays: these could be related to absent documents, poor AML/CFT policies, and complicated ownership patterns. 

Common Challenges and Tips for a Successful Application 

The process of applying for an MPI license in Singapore may be complicated, and several difficulties arise for various businesses. At the same time, businesses can anticipate these issues and take proactive measures to improve their odds of being approved. 

The following are common pitfalls: 

• Incomplete documentation leading to delays in MAS review. 

• Poor frameworks for ensuring compliance with regulations such as AML/CFT. 

• Delays in responding to MAS queries extend processing times. 

Best practices to succeed: 

• Make a list of the documents to be submitted. 

• Improvements in manuals on compliance and risk management processes to make them MAS-compliant. 

• Respond fully and promptly to MAS requests for clarification. 

• Experts like lawyers and auditors can be consulted for accuracy, objectivity, and authenticity. 

Conclusion 

Obtaining a Major Payment Institution (MPI) license in Singapore is crucial for companies that deal with high-volume payment systems. Organisations willing to obtain MPI license in Singapore have a set of eligibility criteria in adherence with Payment Services Act in Singapore. It is managed by the Monetary Authority of Singapore, and only firms that appear reputable and have proper business structures will be granted the license. 

It is also important for firms that seek licensing to meet the requirements that will make them successful in the long run. As a company that is experienced and renowned for expertise, Enterslice assists businesses that may not be aware of the licensing complexities to achieve success. Connect with us for an expert guidance to successfully get your MPI license in Singapore. 

All You Need To About MPI License Singapore