Navigating Compliance in a Rapidly Evolving Payments Landscape Part 1

A Report by CYS Global Remit Legal & Compliance Office

Introduction 

Singapore has firmly established itself as the heartbeat of Asia's financial innovation ecosystem, especially in cross-border payments. The city-state’s strategic geography, robust regulatory infrastructure, and pioneering initiatives like Project Ubin have attracted fintech companies and payment institutions seeking regional leadership. 

However, beneath this success story lies a more complex reality. Recent enforcement actions and changing global compliance standards have sent ripples through the industry, compelling payment firms to reassess their regulatory strategies. 

This comprehensive five-part series explores the critical challenges faced by cross-border payment institutions in Singapore today, covering topics from regulatory headwinds to data privacy complexities. 

Part 1: Ongoing Regulatory Scrutiny  

June 2025 marked a pivotal moment for Singapore’s payments sector. The Monetary Authority of Singapore (MAS) issued composition penalties totalling S$960,000 across five major payment institutions (MPIs) for serious anti-money laundering (AML) and countering the financing of terrorism (CFT) violations. 

This was not merely a regulatory slap on the wrist—it was a clear signal that MAS is serious about compliance standards in the rapidly evolving payments landscape. 

The Compliance Failures That Caught MAS's Attention 

The violations that led to these penalties reveal concerning systemic compliance breaches, including: 

• Database screening failures: Institutions failed to properly screen customers and beneficial owners against critical AML/CFT databases
  

• Beneficial ownership blind spots: Inadequate due diligence when investigating complex ownership structures, leaving potential risks undetected 
  

• Weak internal controls: Insufficient AML/CFT policies and control mechanisms that failed to meet regulatory expectations  
  

What This Means for the Industry

These enforcement actions highlight more than isolated incidents—they demonstrate MAS’s unwavering commitment to raising industry standards under the Payment Services Act 2019 (PS Act). 

The regulator's upcoming information paper promises to shed light on common industry deficiencies and articulate clearer supervisory expectations. For payment firms, this translates to: 

• Higher compliance costs as institutions scramble to plug regulatory gaps 

• Significant operational adjustments to meet enhanced standards 

• Increased scrutiny from both regulators and stakeholders 

Key Takeaway:  Payment institutions can no longer afford a reactive approach to compliance. The S$960,000 penalties serve as both a cautionary tale and a call to action. Senior management must take active ownership of governance and oversight. Compliance is no longer just a back-office function—it’s a boardroom priority that can determine an organization’s future in Singapore’s competitive payments market. 

This regulatory wake-up call is just the beginning. In future parts of this series, we will explore operational, jurisdictional, and strategic challenges that payment institutions must navigate to succeed in this dynamic environment.