Electronic payments (“e-payments”) – Growth and Acceptance?

In this digital age, we are able to buy anything we want with the touch of a button. The internet has made the world a much smaller and more efficient place. Everything relates to instant gratification, from food, to groceries, transport, movie tickets, and the list goes on. The days of typical brick-and-mortar shops are numbered, taking with it the use of cold hard cash. As e-commerce has blown up in the last decade, payments online have also developed in a frenzy. As of March 2017, 42% of online shoppers paid with their credit cards and 39% via other forms of electronic payment such as Paypal. These numbers are in stark contrast to the mere 23% that pay using cash on delivery, signifying a drastic shift in buyer’s behaviour.

The Regulators’ challenge

This would challenge the traditional concepts of financial regulations. The recent changes to the global regulatory framework would provide for further disruptive innovation in technology and financial services. New types of payment systems and technology-based payment services, particularly in the retail sector, are a key focus area in the growing field of Fintech. The regulators across the region, from Hong Kong to Singapore, have identified this to be a major growth area and are thus racing to provide the relevant regulatory framework that is able to carry out the commensurate balance of commerciality and compliances.

Singapore Regulators Take

It is to this effect that the Monetary Authority of Singapore (MAS) in 2016 initiated 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 has consulted twice on Proposed Guidelines to Protect Users on E-Payments. The document specifies the different standards and liabilities that technology providers and users alike may be held to. Although the guidelines are not mandatory, the MAS is empowered to ensure the enforceability of these guidelines by law.

Liability: taking into account contributory acts/omissions

The guidelines said that consumers and small businesses will not be held liable for unauthorised transactions as long as they keep their account details secure.

Account holders who were cautious with protecting their accounts would not be liable for any unauthorised transactions, MAS said. Use of strong passwords, as well as ensuring that regular security updates were performed on the devices used, would contribute towards protecting consumers when such transactions occur. Consumers or small businesses found to be careless in contributing to unauthorised transactions in dispute will be liable for up to S$100. Examples of such occurrences: if a customer misplaces his or her phone, or accidentally gives his password to others.

However, if banks can prove that reckless behaviour by customers led to the unauthorised transactions, consumers would then be liable for the actual loss.

Banks are to keep you informed

The Guidelines also set out the banks’ responsibilities in notifying customers of e-payment transactions. This is in order to allow for account holders to manage and track fund flows digitally. MAS said banks should offer transaction notifications so that account holders can monitor their accounts. However, trigger amounts have yet to be decided although this is being discussed by the industry – as it would not make sense for transaction notifications to occur every time a small transaction takes place. At the minimum, banks should send account holders an SMS or e-mail of the consolidated list of all the e-payments in and out of bank accounts periodically. The information should identify the recipient as well as each transaction’s amount, date, and time.


With the finalisation of the Guidelines, there would be a more defined path for merchants, customers and banks to operate properly.  In his 2017 National Day Rally speech, Prime Minister Lee Hsien Loong quipped that Singapore trails behind other cities when it comes to e- payments, and called for systems to be simplified and integrated. Alongside this simplification and integration will be the regulations that come along with it. Similar legislation has been/will be implemented across the globe, encapsulating similar focal points, only different in taking into account local and regional disparities. In this manner, it is only appropriate to be on top of your requirements as a regulated financial intermediary – regardless of whether you are offering a product or a service to the market.

At Argus, we help you stay on top of your regulatory requirements. We are on abreast with the latest regulatory changes and have a fair estimation of the regulatory landscape future direction. Compliance is not just a regulatory check-the-box exercise, it is a risk management tool that done properly allows significant cost savings. Feel free to drop us a note at info@argusglobal.co on how we can help manage your Compliance Risk, thereby increasing the sustainability of your business. Argus – Compliance Simplified.





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