28 March 2018

On 13 February 2018, the Monetary Authority of Singapore (“MAS”) released a consultation paper on proposed guidelines to protect users of electronic payments. The proposed E-payments User Protection Guidelines (“Guidelines”) aim to encourage wider adoption of electronic payments (“e-payments”) by setting standards on the responsibilities of financial institutions (“FIs”) and e-payment users. The consultation closed on 16 March 2018.

What do the proposed Guidelines prescribe?

The Guidelines will standardise the protection offered to individuals or micro-enterprises from losses arising from unauthorised or mistaken payment transactions from the protected accounts of these account holders. Individuals and micro-enterprises that hold e-payment accounts can expect FIs to provide timely notifications of all e-payment transactions. FIs will be expected to set clear resolution processes for unauthorised or erroneous payment transactions. The Guidelines also set out the responsibilities of e-payments users, including good security practices they should adopt to protect their passwords and e-payment accounts.

Background

In 2016, MAS embarked on a review of existing regulatory framework governing payment services with a view to modernising and streamlining the frameworks to encourage wider adoption of e-payments in Singapore. Arising from this review, MAS consulted twice on the proposed activity-based Payment Services Bill (“Bill”) in August 2016 and November 2017.

One key recommendation to encourage the use of e-payments which arose during MAS’ review was to enhance consumer or account user protection. MAS proposed measures to protect funds belonging to account users and merchants in the proposed Bill. However, a comprehensive framework will also need to provide protection for account users from losses arising from unauthorised or mistaken payment transactions. To reduce risks of unauthorised or mistaken payment transactions to users, MAS proposes to issue a set of Guidelines to standardise the protection given to users arising from these two risks.

Effect of Guidelines

The Guidelines will standardise the protection offered to individuals or micro-enterprises from losses arising from unauthorised or mistaken payment transactions from the protected accounts of these account holders. Individuals and micro-enterprises that hold e-payment accounts can expect FIs to provide timely notifications of all e-payment transactions. FIs will be expected to set clear resolution processes for unauthorised or erroneous payment transactions. The Guidelines also set out the responsibilities of e-payments users, including adopting good security practices to protect their passwords and e-payment accounts.

Reference materials

The following materials are available on the MAS website www.mas.gov.sg:

 

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