Does MAS intend to regulate loyalty programmes?

MAS does not intend for loyalty programmes that are common in the retail space to be regulated as payment services. Such programs are designed to promote the purchase of goods or use of services provided by the loyalty points issuer or any merchant specified by the loyalty points issuer.

Due to their limited use and customer reach, such programmes do not pose the same level of risks that payment services pose. Loyalty points may be “limited purpose e-money” or “limited purpose digital payment token” within the meaning of Part 3 of the PS Act .

Any payment service mentioned in Part 1 of the First Schedule to the PS Act, that is provided by any person in respect only of any limited purpose e-money, is excluded from regulation. Likewise, any service of dealing in, or facilitating the exchange of, any limited purpose (DPT), is excluded from regulation.

In assessing whether loyalty points are “limited purpose e-money” or “limited purpose digital payment token”, MAS will likely consider the following factors among others:

• Whether the programme under which such points are issued is marketed to customers as a loyalty program or as a payment service; and 
• Whether any part of the programme conflicts with its stated objective of promoting the purchase of goods or use of services provided by the loyalty points issuer or any merchant specified by the loyalty points issuer.