Navigating Compliance in a Rapidly Evolving Payments Landscape

A Report by CYS Global Remit Legal & Compliance Office

Part 3: Licensing and Jurisdictional Complexity

Cross-border payment institutions in Singapore face a labyrinth of licensing requirements across jurisdictions. Each country imposes distinct rules, creating a complex regulatory landscape that demands careful navigation and strategic planning.

The Global Licensing Maze 

Different markets require different approaches, and understanding these nuances is critical for any payment institution operating internationally:

European Union 

Requires Electronic Money Institution (EMI) or Payment Institution (PI) licences under PSD2. The EU's harmonised framework offers the advantage of passporting rights — once licensed in one member state, institutions can operate across the EU — but the initial licensing process demands rigorous compliance with stringent capital, safeguarding, and operational requirements.

United States 

Demands Money Transmitter Licences (MTLs), varying by state. Unlike the EU's centralised approach, the US operates a state-by-state system, requiring institutions to secure separate licences in each jurisdiction where they operate. This fragmented landscape means navigating 50 different regulatory regimes, each with its own capital requirements, bonding obligations, and compliance expectations.

United Arab Emirates 

Mandates licensing by the Central Bank or Virtual Assets Regulatory Authority. The UAE's emerging regulatory framework reflects its ambition to become a global FinTech hub, but institutions must carefully determine which authority governs their specific activities and ensure full compliance with evolving requirements.

Canada 

Requires registration as Money Services Businesses (MSBs) under FINTRAC. Whilst Canada's federal system provides more uniformity than the US, institutions must still navigate provincial regulations alongside federal Anti-Money Laundering and Counter-Terrorist Financing obligations.

The Stakes Are High 

Navigating these frameworks is resource-intensive and fraught with risk. Failure to secure proper licences can result in:

• Significant financial penalties 

• Service bans in key markets 

• Irreparable reputational harm 

• Loss of banking relationships 

• Exclusion from payment networks

Singapore-based institutions must also ensure their operations align with MAS's modular licensing under the PS Act, which includes specific obligations for cross-border money transfers. This creates an additional layer of complexity — maintaining compliance at home whilst meeting the diverse requirements of multiple foreign jurisdictions.

Building a Strategic Response

Success in this environment requires more than reactive compliance. Institutions must adopt a proactive, strategic approach that balances regulatory obligations with business objectives.

A multi-layered licensing strategy, supported by robust compliance knowledge and strong regulatory awareness.

Institutions should also consider partnerships with local entities to streamline compliance and market entry. Local partners bring invaluable knowledge of regulatory nuances, established relationships with authorities, and operational infrastructure that can significantly reduce time-to-market and compliance risk.

Key Takeaway

In an increasingly interconnected global payments ecosystem, licensing complexity is not merely a compliance challenge — it's a strategic imperative. Institutions that build robust, scalable compliance frameworks will not only mitigate risk but also position themselves for sustainable growth across multiple jurisdictions.