Key takeaways
- Section 23 of Singapore's Payment Services Act 2019 requires major payment institutions providing domestic money transfer, cross-border money transfer or merchant acquisition services to safeguard relevant money.
- For those services, relevant money must be safeguarded no later than the next business day after receipt; for e-money issuance it must be safeguarded from the time it is received.
- The methods are an undertaking or guarantee from a safeguarding institution, a trust account with a safeguarding institution, or another prescribed manner.
- A firm must notify MAS of its method and safeguarding institution, and needs MAS approval to combine methods.
- Breaches are offences punishable by a fine of up to S$250,000, plus up to S$25,000 a day for continuing offences.
What are the key facts on MAS safeguarding?
Section 23 of the Payment Services Act is the rule that protects customer money held by Singapore's larger payment firms, from receipt until it is paid out.
| Item | Position |
|---|---|
| Rule | Payment Services Act 2019 (PSA), section 23 |
| Regulator | Monetary Authority of Singapore (MAS) |
| Applies to | Major payment institutions providing domestic or cross-border money transfer, merchant acquisition or e-money issuance, and other prescribed licensees and services |
| Timing | Next business day after receipt; from receipt for e-money issuance |
| Penalty | Fine up to S$250,000, plus up to S$25,000 per day for a continuing offence |
| Last checked | 11 October 2026, against the Payment Services Act 2019 |
Who must safeguard under section 23?
Major payment institutions providing money transfer, merchant acquisition or e-money issuance services, and others MAS prescribes.
Under section 23(1) of the PSA, subsection (2) applies to a major payment institution providing domestic money transfer, cross-border money transfer or merchant acquisition services, and to other institutions and services MAS prescribes. Under section 23(3), subsection (4) applies to a major payment institution providing an e-money issuance service, and to prescribed others. A major payment institution is the larger of the two licence classes for payment businesses under the PSA, alongside the standard payment institution licence. Standard payment institutions are not covered unless prescribed. A firm that grows past the major payment institution thresholds therefore takes on section 23 at the same time as its new licence, and should have safeguarding arrangements ready before the licence changes.
What is relevant money?
Money received from or on behalf of a customer for the covered services, less fees and money already paid out as instructed.
Section 23(14) defines relevant money by service. For subsection (2) services, it is the money still held at the end of each business day. For e-money issuance under subsection (4), it is money held at any time, including money received in exchange for e-money. Fees due to the institution, money paid to the recipient as the customer instructed and money paid to others entitled to it are excluded. A business day excludes Saturdays, Sundays, public holidays and bank holidays.
Which safeguarding methods are allowed?
Four methods, the same for both groups of services, with only the timing different.
| Method | Section | How it protects customers |
|---|---|---|
| Undertaking from a safeguarding institution to be fully liable to the customer | 23(2)(a), 23(4)(a) | The safeguarding institution is liable to customers for the relevant money |
| Guarantee from a safeguarding institution for the amount | 23(2)(b), 23(4)(b) | On insolvency, proceeds are paid into a designated trust account for customers (s 23(6)) |
| Deposit in a trust account maintained with a safeguarding institution | 23(2)(c), 23(4)(c) | Money held on trust, not available for the firm's debts (s 23(7)) |
| Any other prescribed manner | 23(2)(d), 23(4)(d) | As set by regulations |
A safeguarding institution is a bank in Singapore or another prescribed financial institution, or, for trust accounts, a prescribed person that meets prescribed criteria. Under section 23(10), banks, merchant banks, finance companies and other prescribed financial institutions cannot act as the safeguarding institution for relevant money they themselves receive. Money in trust accounts and guarantee proceeds accounts cannot be used to pay the institution's debts and is not subject to enforcement orders or court process.
How quickly must relevant money be safeguarded?
By the next business day for transfer and acquiring services, and from the moment of receipt for e-money issuance.
Section 23(2) requires the whole of the relevant money, or a prescribed part, to be safeguarded no later than the next business day after it is received. Section 23(4) requires e-money issuers to safeguard from the time any relevant money is received, so there is no overnight window for e-money float. A firm that both issues e-money and offers cross-border transfers therefore runs two timetables, and its reconciliation needs to show each separately.
Weekends and public holidays matter for the transfer timetable. Money received on a Friday need not be safeguarded until the next business day, Monday, but money still held at the end of each business day is relevant money and must be counted. E-money received on a Saturday must be protected from the moment it arrives. Treasury teams usually solve this by pre-positioning a guarantee or trust balance large enough to cover the expected weekend inflow, rather than relying on a Monday morning transfer.
What must be notified to MAS?
The method used, the safeguarding institution and any change, plus an application to combine methods.
Section 23(9) requires the institution to notify MAS of the safeguarding method, the name of any safeguarding institution and any change to the method. Under section 23(8), MAS may on application approve the use of two or more methods, subject to conditions. Section 23(5) empowers MAS to make regulations on the details, including trust terms, commingling limits, separate book entries for each customer's relevant money, e-money and digital payment tokens, contract terms with safeguarding institutions and disclosures to customers.
What records support section 23?
Records that show each customer's relevant money, e-money and digital payment tokens, and the contracts behind each safeguarding method.
Section 23(5) lets MAS make regulations on, among other things, separate book entries for each customer's relevant money, e-money and digital payment tokens; the terms of contracts with safeguarding institutions; the form of acknowledgments; information given to safeguarding institutions; and dealings with customers, including disclosure. In practice, the institution needs a customer-level ledger that can be totalled at the end of each business day, a register of safeguarding institutions with the method used at each, copies of undertakings, guarantees and trust terms, and the notifications made to MAS under section 23(9).
Those records are also what an administrator would need if the institution failed. Section 23(6) directs guarantee proceeds into a designated trust account for customers, and section 23(7) keeps trust money away from the institution's creditors, but both only work if the ledger can say who is owed what.
How does Singapore compare with the UK and EU?
Singapore's timing is close to the UK and EU for transfers, and stricter for e-money.
| Point | Singapore (PSA s 23) | UK (CASS 15) | EU (PSD2 and EMD2) |
|---|---|---|---|
| Timing for transfer services | Next business day after receipt | End of the business day after receipt (D+1) | End of the business day after receipt |
| Timing for e-money | From receipt | End of the business day after receipt; card receipts within 5 business days | Card receipts within 5 business days of issue |
| Methods | Undertaking, guarantee, trust account, other prescribed | Segregation, insurance or guarantee | Segregation, insurance or comparable guarantee |
| Combining methods | MAS approval needed | Permitted under the rules | National practice varies |
See our guide to the D+1 safeguarding deadline for the UK rule.
How does a daily safeguarding check work?
It applies the right timing rule to each service and compares relevant money with the protected amount.
Worked example. A major payment institution offers cross-border transfers and a stored-value wallet. At the end of Tuesday, a business day, its records show the following.
| Line | S$ m | Rule |
|---|---|---|
| Cross-border transfer money still held at end of Tuesday | 18.40 | Safeguard by end of Wednesday, s 23(2) |
| Less fees earned on those transfers | (0.22) | Excluded from relevant money |
| Relevant money for transfers | 18.18 | |
| E-money float outstanding | 42.75 | Safeguarded from receipt, s 23(4) |
| Trust account balance at a Singapore bank | 40.10 | s 23(4)(c) |
| Bank guarantee for e-money float | 5.00 | s 23(4)(b) |
| Protected e-money float | 45.10 | Covers 42.75 |
The e-money float is covered from receipt: S$45.10 million of trust money and guarantee against S$42.75 million outstanding. The S$18.18 million of transfer money must reach the trust account or other method by the end of Wednesday, unless it is paid out first. Using a trust account and a guarantee together for the e-money float needs MAS approval under section 23(8).
What goes wrong in practice?
Most problems come from timing, from mixing services, and from methods that were never notified.
- E-money top-ups left in a collection account overnight, when section 23(4) requires protection from receipt.
- Transfer money and e-money float pooled in one trust account without records separating the two.
- A guarantee whose amount was set at onboarding and never resized as volumes grew.
- A second safeguarding method added in practice without MAS approval under section 23(8).
- A change of safeguarding bank not notified to MAS under section 23(9).
- Fees deducted from relevant money before they are actually due to the institution.
What should a major payment institution check?
These checks map daily operations to section 23.
- Confirm which services fall under subsection (2) and which under subsection (4).
- Calculate relevant money at the end of each business day, excluding fees and money paid out.
- Safeguard e-money float from receipt and transfer money by the next business day.
- Confirm each safeguarding institution qualifies and is not the firm itself.
- Notify MAS of the method, the institution and any change, and obtain approval before combining methods.
- Keep separate book entries for each customer's relevant money, e-money and digital payment tokens.
- Reconcile protected amounts to relevant money every business day.
Our guides to Hong Kong SVF float, DPT customer asset segregation and global safeguarding rules compared cover neighbouring regimes.
How does Safeheld help?
Safeheld reconciles relevant money to trust accounts and guarantees every business day, by entity and currency, applying the right timing rule to each service.
It produces the report pack for MAS Form 8, which the institution reviews and completes. See daily reconciliation.
Frequently asked questions
Which Singapore payment institutions must safeguard relevant money?
Major payment institutions providing domestic money transfer, cross-border money transfer, merchant acquisition or e-money issuance services, and other licensees or services MAS prescribes.
When must relevant money be safeguarded?
No later than the next business day after receipt for transfer and acquiring services, and from the time it is received for e-money issuance.
What are the MAS safeguarding methods?
An undertaking or guarantee from a safeguarding institution, a deposit in a trust account with a safeguarding institution, or another prescribed manner.
Can a firm use more than one safeguarding method?
Yes, with MAS approval under section 23(8), subject to any conditions MAS sets.
Is a bank allowed to safeguard its own customers' relevant money?
No. Section 23(10) prevents banks, merchant banks, finance companies and prescribed financial institutions from acting as safeguarding institution for relevant money they receive.
What is the penalty for breaching section 23?
A fine of up to S$250,000, and up to S$25,000 for every day a continuing offence continues.
Does section 23 apply to standard payment institutions?
Not unless MAS prescribes it. Section 23(1) and (3) apply to major payment institutions for the listed services, and to other licensees and services only where prescribed.
Are fees part of relevant money?
No. Section 23(14) excludes fees, money paid to the recipient as instructed and money paid to others entitled to it.
References
About Safeheld
Safeheld is reconciliation and regulatory financial control software for regulated firms that hold client money. For Singapore payment institutions it reconciles relevant money and e-money float to trust accounts and guarantees every business day, and keeps the records MAS expects. To discuss your safeguarding operations, contact us at safeheld.com/contact.
This article is general information on Singapore payment services rules and is not legal or regulatory advice.