As a payment service provider, there are a few things to know about partnering with a company based in Singapore
As a thriving financial hub and a leader in the Asia-Pacific business community, companies around the world are looking to invest in Singapore-based businesses.
However, before you form a potentially lucrative partnership, you must perform a Singapore company check.
What is a Singapore KYC (know your customer)? We’ll take a look at what you need to know to meet government compliance standards.
The Monetary Authority of Singapore (MAS) has specific requirements for PSPs looking to partner with business.
These requirements are as follows:
- Verify phone number
- Address proof verification
- Employment status confirmation (with user consent)
- Bank statement verification (for verifying user income)
- Certification of ID Documents by lawyers or Notary
- Initial deposits using a cheque from a bank in Singapore
- Other ID verification checks
MAS allows payment service providers to put off a Singapore company check until the customer starts the account opening process. However, it is a good idea to get started early, the process can be time-consuming.
Regulations You (as a PSP) Must Follow
Not only is a Singapore KYC a requirement for companies before they can partner with a payment service provider. The PSP is also subject to specific rules listed under the Payment Services Act.
If you aren’t sure if this applies to your business, here’s a list of organizations that are legally required to adhere to the rules in the Payment Services Act.
- Domestic money transfer services
- International money transfer services
- Account creation services
- Merchant acquisition services
- E-money issuance services
- Digital payment token services
So what are the rules PSPs must follow? The regulations are fairly straightforward and not that different from the ones existing in other countries.
All payment providers must be prepared to counteract any suspected money laundering activities. This includes implementing fraud prevention systems and ensuring all customers undergo a verification/onboarding process.
The onboarding process includes identity verification. As a PSP, it’s a good idea to keep records of all verification processes handy. You never know when the documents will be needed.
Due diligence is required for both low and high-risk customers. The law does allow for a simple due diligence process for low-risk customers, but ones considered at a higher risk must go through a more stringent process.
Companies doing business in Singapore must also follow the Financial Services and Markets Bill (FSM Bill). The bill helps to minimize risks by licensing PSPs and ensuring they meet all legal requirements under the AML and CFT acts.
When Should a PSP Increase Due Diligence
As mentioned earlier, high-risk companies must undergo a more diligent company background check. So, how do you know when it is required?
- Enhanced due diligence is required in Singapore when,
- Transaction activities change
- The institution changes document standards
- Lack of appropriate identification information
- There’s a physical change in relations with the customer
If you notice any of these items, it is time to perform a KYC check. You also have a legal obligation to report suspicious financial activities to the Singapore authorities.