Under the new Guidelines, individuals and micro-enterprises
who hold e-payment accounts can expect financial institutions to provide timely
notifications of all e-payment transactions. Financial institutions will be
expected to set clear resolution processes for unauthorised or erroneous
The Monetary Authority of Singapore (MAS) has launched
a public consultation on proposed guidelines to protect users of electronic
payments or e-payments.
The promotion of e-payments and the drive towards a cashless
society is one
of the national strategic projects under Singapore’s Smart Nation plans. The
proposed E-payments User Protection Guidelines aim to encourage wider adoption
of e-payments by setting standards on the responsibilities of financial
institutions and e-payment users.
In 2016, MAS embarked on a review of the regulatory
framework governing payment services in Singapore with a view to modernising
and streamlining the existing frameworks to encourage the wider adoption of e-payments
in Singapore. MAS consulted twice on the proposed activity-based Payment
Services Bill in August
2016 and November
A key recommendation from the payment services regulatory
review was to enhance consumer or account user protection. MAS has proposed
measures to protect funds belonging to account users and merchants in the Bill.
However, a comprehensive framework will also need to provide protection for
account users from losses arising from unauthorised or mistaken payment
To reduce these risks of unauthorised or mistaken payment
transactions to users, MAS proposes to issue a set of guidelines to standardise
the protection given to users arising from these two risks. MAS plans to
develop and publish the Guidelines in the first half of 2018.
The guidelines are for individuals and micro-enterprises, employing
fewer than 10 persons or with an annual turnover of no more than S$1 million. They
are intended to protect e-payment users from higher value losses. Accounts
which can hold a limited amount of less than S$500 such as transport stored
value cards are not covered in these guidelines.
The proposed guidelines will cover: 1) Liability caps to
clarify the amounts that the account user and the financial institution is
liable for in any unauthorised payment transaction; 2) Notification duties of
account users and financial institutions for all payment transactions; and 3)
Resolution processes for both unauthorised payment transactions and mistaken
The Guidelines clarify when, and if so how much, an account
holder should pay for losses arising from unauthorised transactions. Where the
account holder did not contribute to the loss, and where he took full care of
his protected account, he is not liable for such loss. The account holder is
liable for a loss of not more than S$100 when the account user was not reckless
but nevertheless contributed to the loss. If the loss was primarily due to recklessness
of the account user, then the account holder is liable. But the actual loss
will be capped at any applicable transaction limit or daily payment limit that
the account holder and FI have agreed to.
Under the Guidelines, FIs should provide sufficient
transaction notifications to allow the account holder to properly monitor his
protected account. The FI should send the account holder a consolidated list of
all the transactions made to or from the protected account, at least once a
day. The notifications, containing detailed information of the transaction
including, recipient credentials, transaction amount, time and date, and the
merchant’s trading name, should be sent to the account holder’s phone number by
SMS or email address.
At the same time, account holders should provide their
updated contact information to the FI and monitor notifications from the FI.
They should report unauthorised transactions to the FI by the next business day
and give the FI full information. They should also make a police report if
requested to by the FI.
Account users are encouraged to check the recipient’s
details carefully before executing payment transactions. In the event of a payment
made accidentally to the wrong person, both the payer’s FI and the recipient’s
FI should make reasonable efforts to recover the money paid to the wrong person
within the proposed timeline. This includes informing the recipient of the
transaction and that wrongful retention of money that does not belong to him or
her, is a criminal offence.
MAS is seeking feedback from financial institutions, businesses,
and other interested parties, including members of the public, consumer
associations, government agencies, law firms, trade associations, non-profit
organisations, charities etc. who may be impacted by or interested in the
The public consultation will run from 13 February to 16
March 2018. Copies of the public consultation paper and policy highlights
document are available on the MAS website. MAS invites e-payment users,
financial institutions, and businesses to give feedback on the proposed
MAS Deputy Managing Director, Ms Jacqueline Loh said, “MAS
hopes that these guidelines will help to make e-payments simpler and more
secure, and give individuals and micro-enterprises more confidence to adopt and
integrate e-payments into their daily activities.”
The Consultation Paper can be accessed here.
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