Lawmakers passed the Payment Services Bill after second reading on January 14. The legislation combines the 2006 Payment Systems (Oversight) Act and the 1979 Money-Changing and Remittance Businesses Act.

Speaking at the second reading of the bill, Ong Ye Kung, a government lawmaker and a board member of the Monetary Authority of Singapore (MAS), the city state’s central bank, says the legislation “provides for regulatory certainty and consumer safeguards, while encouraging innovation and growth of payment services and financial technology”.

He adds that it will also mitigate key risks, including money laundering or terrorism financing, and cyber risk.

“Proper oversight of these risks will both protect the public and facilitate a vibrant payment services sector,” Mr. Ong says in a speech on behalf of Tharman Shanmugaratnam, Singapore’s deputy prime minister who is also the minister in charge of the central bank.

He says MAS will now regulate domestic money transfers and merchant sign-ups for digital payment services, and that all providers of such services in the city state will have comply with anti-money laundering and anti-terrorism financing requirements.

He also says users of mobile wallets – a technology that allows payments via smartphones – cannot hold more than S$5,000 (US$3,696.86) at any time in their wallets, and are barred from transferring more than S$30,000 in a year to accounts other than their own.

According to the chief technology officer of a Singapore-based financial technology company, although the new legislation will make money laundering and terrorism financing activities tougher, it’s “not foolproof”.

“What MAS needs to do is to strengthen its ties with other countries, so that they can share key information with one another in order to combat money laundering and terrorism financing activities,” he tells Asia Asset Management, speaking on condition of anonymity.