MPI License: Complete Guide to Major Payment Institution Licensing

With a strategic geographic location, 25+ free trade agreements, multiple tax incentives and grant schemes, and a pro-business environment, it is no wonder that Singapore is the ideal location for many businesses to set up their operations.

Among thousands of businesses, payment service providers and facilitators have been the fastest-growing in Singapore. Seeing that the old regulatory framework is inefficient in monitoring them, the government introduced the Payment Service Act in 2019. This act governs three types of licenses: money-changing license, Standard payment institution license and major payment institution license.

In this guide, you'll learn what the Major Payment Institution (MPI) license is, the seven payment services it permits, and the transaction thresholds that distinguish it from the Standard Payment Institution license. You'll also discover the eight core requirements, application process steps, processing timelines, and key considerations for businesses planning to obtain an MPI license in Singapore.

Key Takeaways

• Understanding the Major Payment Institution (MPI) license helps payment service businesses, fintech founders, and cross-border payment companies evaluate whether Singapore is the right jurisdiction to scale their regulated operations across Southeast Asia.
• The MPI license is issued by Monetary Authority of Singapore (MAS) under the Payment Services Act, 2019 for high-volume payment service providers.
• Required base capital: S$250,000, plus security deposit of S$100,000–S$200,000 held with MAS.
• Triggered when monthly transactions exceed S$3M (single service) or S$6M (multiple services), or daily outstanding e-money exceeds S$5M.
• Application processing: 6–8 months, fees of S$1,000–S$1,500, and rigorous documentation including AML/CFT policies, technology risk management, and a qualified compliance officer.

The Major Payment Institution (MPI) license is a regulatory authorisation issued by the Monetary Authority of Singapore (MAS) under the Payment Services Act, 2019. It permits financial institutions to offer high-volume payment services in Singapore, with a minimum base capital requirement of S$250,000.

According to the Payment Service Act, 2019, a major payment institution should offer one or more of the following payment services.

1. Account issuance services: Issuing e-wallets, electronic accounts and prepaid cards

2. Domestic money transfer service: P2P transactions, Payment gateway services and payment kiosk services

3. Cross-border money transfer service: Inbound and outbound service in Singapore 

4. Merchant acquisition service: Online payment gateways for businesses  

5. E-money issuance service: Issuing e-money to pay merchants or any other individual 

6. Digital payment token service: Buying and selling Digital Payment Tokens (DPTs) or providing a platform that allows users to exchange them 

7. Money-changing service: Buying or selling foreign currency

An institution that offers only foreign exchange service should apply for a money-changing license, not an MPI or SPI license.

Both Major Payment Institutions and Standard Payment Institutions offer the same services. What makes them different is the threshold of their transactions. An MPI's transactions exceed the following limits.

1. S$3 million monthly transaction on providing one payment service (except e-money and money changing service)

2. S$6 million monthly transaction on providing two or more of the payment services. (except e-money and money-changing service)

3. S$5 million daily outstanding e-money

Financial institutions whose transactions remain below this threshold should apply for a Standard Payment Institution (SPI) license.

1. Singapore registered entity 

The first and foremost requirement for your business to obtain an MPI license is for it to be registered in Singapore. If you are a foreign-based company, you can either register a subsidiary or a branch.

2.  Secured occupied office

The financial institution must have a permanent office that is not shared space. All the books and records of your business must be securely kept in this office. Moreover, this office must have a person appointed to answer the queries and complaints of consumers.

3. Base Capital

Financial institutions that wish to obtain a major payment institution license must have a base capital of S$250,000. In addition, you must maintain security of S$100,000 to S$200,000 in the form of a cash deposit, bank guarantee or any other form approved by the MAS, to be used to pay outstanding claims of users in the event the license expires or is revoked.

4. Singapore resident as Director

Your financial institution needs to have at least 1 executive director who is either a citizen or a Permanent Resident (PR) of Singapore. 

5. Fitness and propriety

All your controllers and directors must fulfil “Fit and proper” guidelines issued by the Monetary Authority of Singapore. They must also have relevant experience and expertise in operating a payment service business.   

6. Compliance arrangements

The financial institution has to demonstrate that it has effective and adequate resources to fulfil compliance and AML/CFT requirements. For this, they have to appoint a qualified compliance officer who can oversee this function. 

7. Technology risk management 

If your financial institution intends to provide payment services on an online platform, then you must perform a penetration test that identifies the risks involved. The identified risks should be securely patched, and then, the efficacy of these patches should be tested. 

8. Audit function

Your business processes, controls and compliance with regulatory requirements should be regularly assessed by an independent internal audit team. In addition, you have to appoint an auditor at your own expense to carry out audits of your accounts and transactions that are related to your payment services.

The MPI license application process is lengthy, as it requires preparing multiple documents, answering MAS queries about your business as and when required, and waiting for approval. It can take anywhere between 6 and 8 months for the application to be processed by the MAS. Here is what it looks like.

1. Pre-application preparation

You need to start by thoroughly examining the scope of your business operations, the type of payment service you wish to offer, and your projected transaction volume. Consult a lawyer to understand the MAS requirements and start drafting internal policies based on them. 

2. Document collection

There are many documents required for the MPI license application, such as your business profile, organisational chart, AML and CFT policies, technology risk policy, financial projections, etc. Make sure that these documents are complete and provide all details that are required by MAS. 

3. Application submission

Use your ONE Pass for registration and login at the Monetary Authority of Singapore's e-licensing portal. Fill out all the application details and submit it. You will be required to pay an application fee of between S$1000 and S$1500.

4. Review and approval

Once the application is submitted, the MAS will extensively review the accuracy and completeness of your documents, your risk management policies and any other compliance requirement. They may ask for more documentation and interview your directors. Once they are satisfied with your financial institution's legitimacy, your application will be approved.

Establishing your business in Singapore opens up opportunities across the entire Southeast Asian market. Getting an MPI license would demonstrate your business’s capability in providing a broad range of services to your customers and inspire confidence among your investors. So start preparing your business around the MAS requirements, gather all your documents and submit your MPI license application.

And for other businesses that want to export their products and services to Singapore, use XFlow to receive your cross-border payments from such Major Payment Institutions. With Xflow, you not only get a mid-market rate on foreign exchange, but your payments are also settled within 24 hours in your Indian bank account.

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