On January 31, the Monetary Authority of Singapore (MAS) announced it would allow banks and credit card distributors more time to implement its E-Payments User Protection Guidelines. 

The guidelines, first announced in September 2018, were due to be taken into effect at the end of January 2019, but according to MAS, a number of lenders requested that this deadline be postponed due to the “scale and complexity” of the system amendments stipulated by the guidelines. The new due date has now been delayed by six months to June 30, 2019. 

According to Lu Zurawski, consumer payments practice lead at ACI Worldwide, the MAS’s new payments regulation “would have challenged even the leanest and most agile” financial companies, but “nudge-based” law-making is vital to innovation, and is crucial for Singapore’s cashless society target to be reached. 

“It’s not a total surprise for the Singaporean banks to have been granted more time to accommodate these eminently sensible e-payment user protection guidelines,” said Zurawski, in an email. 

“When they were announced, the new rules came with a somewhat aspirational three-month implementation window. But a rational assessment of the new technical systems needed by financial institutions to handle customer notifications, and the need to re-assess liability positions in such a short timeframe would have challenged even the leanest and most agile FIs.”

Singapore’s government has been moving towards establishing a cashless economy over recent years. During a National Day rally speech in August 2017, Prime Minister Lee Hsien Loong said that the city-state had fallen behind to China, with statistics revealing that 6 in every 10 transactions authorised in Singapore still involved cash. 

In September 2018, MAS introduced the Singapore Quick Response Code (SGQR), allowing transactions to be simplified by transforming into a universal code for numerous payment schemes. The system was adopted by 27 different payment schemes all over the country. 

“Although MAS has granted more time in this case, there is a still a global trend for payments regulators to use this kind of ‘nudge-based’ guidance as a way of signalling to the financial services industry the expected norms for customer service in new digital economies,” said Zurawski.

According to a report published by QBE Insurance in January 2019, 24% of SMEs in Singapore still prefer to use cash over cheques, and while 71% of participants were aware of the country’s major peer-to-peer payment platform, only 26% opted to make use of it. 

“Government support for digitalisation was also raised in the findings, highlighting a disconnect between awareness and uptake,” QBE wrote in the report.

“Whilst 65% of SMEs indicated that they are aware of the various forms of government support available to help businesses digitalise, only 30% have gone on to utilise the support. This is despite the realisation by many businesses that they lack the digital skills needed to move forward.”

In a speech delivered in September 2018, Singapore minister for education and MAS board member Ong Ye Kung said: “All these efforts will come to naught if people do not feel safe using e-payments.

“The last piece of the e-payments jigsaw is regulations for payments that are transparent, easily understood and give sufficient peace of mind to all parties,” he added.

“Financial institutions are expected to provide timely payment transaction notifications to users. When a user sees that an unauthorised transaction has occurred, he should as quickly as possible notify his financial institution, which will investigate, assess and provide compensation where applicable, to claims in a timely manner.”

Zurawski also noted: “While some industry players may argue that the guidelines are not totally clear and open to varying interpretations, the direction of travel of this kind of regulation is reasonably clear. In common with similar initiatives in Europe, the UK and Australia, the spirit of these payment guidelines is to ensure that account holders have full visibility and control over their payment accounts. This shift towards customer-centric transparency of payments information is to be welcomed.”