The Monetary Authority of Singapore (MAS) has issued licences to four different companies to date, allowing them to offer digital payment token services in Singapore.
The first digital payment token licence was granted to Singapore-based fintech firm FOMO Pay in September, followed by Australian cryptocurrency exchange Independent Reserve and local bank DBS’ brokerage arm DBS Vickers in October, and most recently, Singapore-based crypto payment provider TripleA in November.
MAS has received 170 licence applications from DPT providers including global crypto exchanges such as Coinbase and Kraken. 30 applications were withdrawn after engagement with MAS and two have been rejected.
According to Louis Liu, founder and CEO of FOMO Pay, securing this licence wasn’t easy at all. It took almost two years as MAS sets a very high and strict standard when it comes to DPT service applications.
It closely reviews all applications and considers various factors, including the applicant’s understanding of risks relating to money laundering and financing of terrorism and the technology risks posed by their business model, as well as the adequacy of controls instituted to mitigate such risks, among others.
Although the licence approval process was challenging, he also felt that MAS has been very “collaborative and productive”, as they are open to discussion and acts like a partner or collaborator.
“Since the company was founded, we have been investing heavily to continuously improve our compliance, policies, procedures and risk management system. It’s years of effort to build a robust foundation, which helped us to obtain the licence. It’s a recognition for FOMO Pay and our excellent team, which made this happen,” he added.
Making crypto a mainstream mode of payment in S’pore
Founded in 2015, FOMO Pay is a payments aggregator gateway for merchants. It was one of the founding members of the SGQR Taskforce, a government-led initiative to develop a common QR code standard for e-payments.
The company currently serves over 10,000 merchants and financial institutions with one-stop digital payment services, including QR code payment, e-wallets, credit cards, and buy-now-pay-later programs.
With the licence, FOMO Pay is able to conduct four out of seven key regulated activities under the Payment Services Act (PSA) licensing framework. Previously, the company bagged a cross-border transfer services licence from MAS.
Merchants will now be able to leverage FOMO Pay’s services to accept and process payment transactions.
FOMO Pay will also be able to carry out local money transfer services in Singapore for its clients, as well as facilitate transactions with digital payment tokens, including cryptocurrency and the central bank digital currency (CBDC).
According to Louis, the licence also gives them the ability to expand its product offering of digital payment token solutions to corporate clients.
We intend to roll out digital payment services for merchants soon. It will be similar to e-wallets or credit cards. Our solution will help mitigate risks of handling crypto for our clients.
For instance, when merchants key in the amount, FOMO Pay will convert it into the amount of bitcoin, CBDC (central bank digital currency), or other digital payment tokens. Customers will scan and pay in digital payment tokens, and the merchant will receive the exact amount of fiat currency and not be exposed to any price fluctuation risk.– Louis Liu, founder and CEO of FOMO Pay
Reasoning this move, Louis said that he observed that more people are starting to use digital tokens as a mode of payment.
“Our job is to make sure that when they visit Singapore and spend, our merchant clients will be able to accept their mode of payment. Singapore is an international hub for business and technology, and FOMO Pay wants to contribute to developing crypto and blockchain technology, and prepare for the Web 3.0 world.”
Tech acceleration will further push the boundaries of payment
In this year’s Singapore Fintech Festival, Ravi Menon, the managing director of MAS, pointed out that Singapore could become one of leading players when the crypto economy takes off.
Singapore’s openness together with its clear rules and regulations towards digital payment tokens, including cryptocurrencies, are attracting more crypto players coming to Singapore to set up offices and apply for the licence.
Furthermore, Singapore is now building technology infrastructure and technical competencies to issue a “digital Singapore dollar” in the future.
FOMO Pay is actively participating in this area to help build and foster an efficient and inclusive payment ecosystem. Our goal is to always be at the forefront of the next generation in payments.
Every business model is a balance of three types of flows: data flows, money flows, and the flows of goods. The evolution of communications technology made the flow of data much more efficient, and now the other two must catch up.– Louis Liu, founder and CEO of FOMO Pay
He added that we have started the 5G wave and planning of 6G, which will only propel the payments industry.
“From the payments perspective, it will put more money into the Internet of Things (IoT), smart contract and blockchain technology. FOMO Pay takes this trend as an opportunity and is investing in R&D in these areas for the 5G and 6G world.”
Louis further commented that whatever they work on next will be based on their customers’ demand, evolution of the payment industry, regulators’ guidance and other relevant factors.
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Featured Image Credit: FOMO Pay / Generation T