The Monetary Authority of Singapore (MAS) announced the establishment of a Payments Council, comprising 20 leaders from banks, payment service providers, businesses, and trade associations. Members are appointed for a two-year term. The full list of members is provided below this article.
E-payments is one of the selected focus areas under the Singapore government’s accelerated Smart Nation programme. The Payments Council is part of a series of initiatives by MAS towards realising the vision of an e-payments society in Singapore. This includes facilitating the development of seamless payments solutions like PayNow, supporting the introduction and rollout of unified point-of-sale terminals at merchants, and introducing new payments legislation to safeguard consumer interests and facilitate innovative payment solutions.
The Payments Council aims to formally bring together both the providers and users of payment services in Singapore. It is expected to encourage collaboration within the payments industry, promote interoperability among e-payments solutions, develop strategies to drive the pervasive adoption of e-payments, and advise and make recommendations to MAS on payments related policies.
Though earlier a broader scope was considered for the Council, MAS has discarded several of those ideas based on industry feedback and the Council will provide a purely advisory role to MAS on payments related issues.
Mr Ravi Menon, Managing Director, MAS will chair the Council. Mr. Menon said, “We have many good e-payment solutions in Singapore. We need to make them more inter-operable and better integrate them with individual and business use cases so that more people will adopt e-payments. The Payments Council brings together the various parties that can help achieve this. Our mission is to make e-payments simple, seamless, and secure for all Singaporeans.”
Feedback on scope and mandate
MAS proposed to set up a Payments Council with a mandate to foster innovation, competition and collaboration in the payments industry and conducted consultation with the industry from August 25, 2016 till October 31, 2016, regarding a) Governance and stakeholder engagement; b) Coordination and implementation; c) Research and surveillance; and d) Advisory, policy and enforcement.
MAS considered the feedback ( summary of responses available here) carefully, and has incorporated specific suggestions into the scope and mandate of the proposed Payments Council. For example, based on the feedback, the Council will no longer undertake project management, or take up any of the roles of the Singapore Clearing House Association (SCHA) or act as a single point of contact for public feedback and complaints.
Some of the key issues raised were as below:
A few respondents raised concerns that undertaking project management activities would be a costly endeavour due to the additional funding and resources required. MAS agreed that the objectives of the Payments Council should be to facilitate stakeholder engagement, promote collaboration and coordination, and provide an advisory role to MAS on payments related issues. The Payments Council will not undertake and implement projects. But it may be called upon to facilitate strategic payments projects and initiatives.
Division of roles between MAS and Payments Council
Many respondents expressed concerns about the Payments Council’s role in governance and enforcement, and sought clarity on the division of roles between the Payments Council and MAS, which has a mandate over payment system supervision and oversight. Several respondents suggested that the Payments Council would serve best in an advisory role instead of functioning as a regulatory body. Objectives related to governance, regulation and policy-making will continue to reside with MAS.
Assuming Responsibilities of SCHA
MAS proposed that the Payments Council could assume SCHA’s current role as one of its activities. The majority of respondents commented that this could lead to conflict of interest and confidentiality. The Council Members could be vendors appointed by SCHA to manage and operate payment systems. Potential confidentiality issues related to contracts could also arise from this.
MAS agreed and the Payment Council will not be empowered to establish and enforce by-laws and rules and regulations of payment systems, nor will it be empowered to appoint vendors for payment systems. However, in order to improve coordination between the Payments Council and SCHA, the Chairman of the SCHA will be invited to join the Payments Council as an ex-officio member.
Role of Council as Single Point of Contact
Most respondents disagreed with the proposal for the Payments Council to function as a single point of contact for public feedback and complaints, and many pointed out that existing channels (via MAS, MoneySense, the Association of Banks and Consumers Association of Singapore) are already in place for such engagements. Furthermore, as a multiparty body, it would be challenging for the Council to route the feedback to the right parties.
MAS agreed that complaints and feedback at an institutional level should remain with the relevant organisation.
Proposed Membership Structure and Representation
Most respondents agreed that the Payments Council ought to be represented by members from the supply and demand side and agreed with the proposed composition. They also agreed that representation from each member should be at a CEO or senior management level.
Some respondents requested for clarification on Payments Council representation and selection criteria, and highlighted that membership ought to be limited to prevent the Council from becoming too large and unwieldy. A few respondents also cited concerns that the inclusion of demand and government members might hinder the progress of discussion due to a lack of familiarity with the payments industry.
MAS will invite members that can best represent their relevant community. From the supply side, MAS will draw representation from local and foreign banks, as well non-bank payment service providers. In order to reflect the views of the diverse demand side users, MAS will invite businesses, trade associations and chambers of commerce.
MAS’ Role as Chair in the Payments Council
Most respondents agreed that MAS’ role as chair of the Payments Council would best serve the purpose of driving initiatives aligned to Singapore’s long term payments vision. A few respondents were concerned that the Payments Council would be too heavily influenced by a public body, which could possibly hinder the mandate to promote innovation. These respondents preferred an independent party to chair the Payments Council.
MAS responded that it has long supported and promoted a culture of innovation in the financial sector and understands this to be critical in developing an open and efficient payments industry. MAS believes its role as chair in the Payments Council will balance public and private interests, and will continue to encourage innovation as long, as it does not run counter to the safety and soundness of the ecosystem. MAS will invite FinTech players to join the Council as members, as well as share the latest innovations and developments with the Payments Council.
Composition of payments council
Chairman– Ravi Menon, Managing Director, MAS; Banks– Amol Gupte, Head of ASEAN (Citi Country Officer), Singapore, Citibank; Piyush Gupta, CEO, DBS Bank Ltd.; Samuel Tsien, CEO, OCBC Bank Ltd.; Judy Hsu, CEO, Standard Chartered Bank (Singapore) Ltd.; Wee Ee Cheong,CEO, United Overseas Bank Ltd.; Payment service providers– Deborah Heng, General Manager (Singapore), Mastercard; Jeffrey Goh, CEO, NETS Pte Ltd.; Rohan Mahadevan, APAC CEO, PayPal Pte Ltd.; Ooi Huey Tyng, Country Manager (Singapore and Brunei), Visa Worldwide Pte Ltd; Businesses– Anthony Tan, Group CEO, Grab; Alexis Lanternier, CEO, Lazada Singapore; Nick Nash, Group President, Sea Pte Ltd.; Lim Hock Chee, CEO, Sheng Siong Group Ltd.; Robert Yap, Executive Chairman, YCH Group; Trade associations– Kurt Wee, President, Association of Small and Medium Enterprises; Yeo Hiang Meng, President, Federation of Merchant Associations; Vincent Tan, President, Restaurant Association of Singapore; Ho Meng Kit, CEO, Singapore Business Federation; R Dhinakaran, President, Singapore Retailers Association; Ng Nam Sin, Chairman, SCHA