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Why is it necessary to regulate the provision of an electronic wallet (e-wallet) as a separate activity from the issuance of e-money?
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Source: https://www.mas.gov.sgThe e-wallet is a payment account from which the customer pays. A consumer purchases e-money from a business to enable him to make money transfers or purchase goods or services from participating individuals and merchants which accept such e-money.
Often, the entity operating the e-wallet also issues the e-money. However, there is also a possibility that the e-wallet is provided by an entity that is separate from the issuer of the e-money.
The service provider that provides and maintains this e-wallet performs an account issuance service, which poses all four key risks and concerns that need to be addressed:
- Money laundering/terrorism financing (MT/FT) risks
- Technology risk
- User protection; and
- Interoperability concerns.
The activity of e-money issuance however only carries user protection risks. The Payment Services Act (PS Act) obliges major payment institutions (MPIs) that issue e-money to safeguard customer money from their own insolvency.
This information provided here is sourced from the MAS website.
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