SVF / MSB: overview

We compared SVF licenses in Singapore and MSB registration in Canada.

SVF/MSB

This article collects all needed information about SVF licenses in Singapore and MSB registration in Canada into a single source.  At the end of the article, you can find a comparison chart for your convenience.

We get a lot of issues about recommendations of Payment Institutions.

There is no single solution for all. It all depends of the individual request.

The Singapore Stored Value Facility is a good opportunity to provide online accounts and payment services to customers around the world.

The SVF license in Singapore can be considered as Electronic Money Institution (EMI) in Europe. This license is necessary if your activity involves an electronic money issue, a payment system establishment. 

Money Service Business (MSB) is a non-bank financial institution that allows you to conduct the following financial activities: currency exchange, money transfers, service of ATMs , transactions, cryptocurrency exchange.

So, let’s go through the main parameters and begin from Singapore Stored Value Facility.

Singapore is already one of the world’s top financial hubs, and it is constantly innovating. This is due to the developed local economy and financial system, The Monetary Authority of Singapore (MAS), the financial and AML regulator, has created a friendly and sustainable environment for fintech companies. 

The country’s legislation in Singapore does not specify strict requirements for the applicant.

When making decisions, the authorized bodies are guided by international standards. The SVF payment license can be one of two types:

SPI – Singapore Standard Payment Institution License

Standard payment institution limitations:

S$3 million monthly transactions for any payment service (other than e-money account issuance and money-changing services)

S$6 million monthly transactions for two or more payment services (other than e-money account issuance and money-changing services).

S$5 million of daily outstanding e-money

Activity Type:

Account issuance service
The service of issuing a payment account or any service relating to any operation required for operating a payment account, such as an e-wallet (including certain multi-purpose stored value cards) or a non-bank issued credit card.

Domestic money transfer service
Providing local funds transfer service in Singapore. This includes payment gateway services and payment kiosk services.

Cross-border money transfer service
Providing inbound or outbound remittance service in Singapore.

Merchant acquisition service
Providing merchant acquisition service in Singapore where the service provider processes payment transactions from the merchant and processes payment receipts on behalf of the merchant. Usually, the service includes providing a point-of-sale terminal or online payment gateway.

E-money issuance service
Issuing e-money to allow the user to pay merchants or transfer to another individual.

Digital payment token service
Buying or selling digital payment tokens, or providing a platform to allow persons to exchange DPTs.

Money-changing service
Buying or selling foreign currency notes.

Share capital requirement:
S$100 000

Issuance timeframe:
5 – 6 months

MPI – Singapore Major Payment Institution License

Advantages of Singapore Major payment institution license: 

Major Payment service provider license has no restrictions on the volume of transactions and amount of transactions 

The new flexible regulation for payment services providers has a favorable license regime with low fees; Singapore is eager to support the development of crypto businesses 

Singapore is already one of the world’s top financial hubs, and it is constantly innovating. The Monetary Authority of Singapore (MAS), the financial and AML regulator, has created a friendly and sustainable environment for fintech companies.

Low corporate taxation

Activity Type:

Account issuance service
The service of issuing a payment account or any service relating to any operation required for operating a payment account, such as an e-wallet (including certain multi-purpose stored value cards) or a non-bank issued credit card.

Domestic money transfer service
Providing local funds transfer service in Singapore. This includes payment gateway services and payment kiosk services.

Cross-border money transfer service
Providing inbound or outbound remittance service in Singapore.

Merchant acquisition service
Providing merchant acquisition service in Singapore where the service provider processes payment transactions from the merchant and processes payment receipts on behalf of the merchant. Usually, the service includes providing a point-of-sale terminal or online payment gateway.

E-money issuance service
Issuing e-money to allow the user to pay merchants or transfer to another individual.

Digital payment token service
Buying or selling digital payment tokens, or providing a platform to allow persons to exchange DPTs.

Money-changing service
Buying or selling foreign currency notes.

Share capital requirement:
S$250 000

Issuance timeframe:
6 – 12 months

Nowadays, money transmission is large, growing and increasingly fintech-based. Maybe you want to be part of this business, like MSB in Canada.

Financial system in Canada is among the most reliable in the world.

Canada, which owns the ninth largest economy in the world, is the only one that fully complies with all requirements for taxes, the state of the securities market, the level of corruption, investor protection, property rights, technology, and innovation.

Which opens up great opportunities for a stable, growing business. One of such opportunities is the Money Service Business registration.

MSB Canada does not require a cash deposit
Among the requirements for obtaining an MSB license in Canada there are no special amount for Authorized capital. This is a huge benefit compared to EMI licenses in some EU countries where the capital of your company must be 350 000 euros.

Faster than other licenses
The process of obtaining the MSB license in Canada may take from 1 to 3 months. This is quite fast compared to another financial licenses you can get in Europe. For example, the service time for obtaining an EMI-license in some European country is usually from 6 month till 1 year. The time you will spend on bureaucracy, you can use for developing your business instead. This is another compelling reason why you should obtain MSB license in Canada.

Share capital
Minimum capital is not determined by the supervising authority.

Management
Directors and AML specialist do not have to be local.

Activity type:

Currency Exchange
Conducting transactions in which you exchange one type of currency for another (for example, exchanging U.S. dollar for the Canadian dollar). However, you should remember that the purchases made for foreign currency are not considered as the foreign currency.

Money Transfer
Money transfer from one individual or legal entity to another using the electronic money transfer network or any other method.

Issue or redemption of money orders, traveler’s checks or other similar negotiable instruments.

Trading in Virtual Currency

It includes virtual currency exchange and transfer services.

The virtual currency exchange services include the exchange of:

  • cash funds for virtual currency;
  • virtual currency for cash funds;
  • virtual currency for another virtual currency.

The services on transferring virtual currency as a payment instrument include:

  • virtual currency transfer (sending) at the client’s request;
  • receipt of the virtual currency transfer for transferring to the recipient.

The new legislation in Canada, which came into force in early June 2020, has opened the green light for crypto-exchanges, as well as for payment operators dealing with crypto-currencies. Now, these organizations are officially classified as the financial service providers.

Below is the information in the form of a comparative chart:

CriteriaCanada MSBSingapore SPISingapore MPI
CountryCanadaSingaporeSingapore
Authorized capitalNo liabilities in the authorized capitalMin SGD 100 000Min SGD 250 000
Local office availabilityNo office space requiredOffice space neededOffice space needed
Local staff availabilityLocal entrepreneur neededLocal director and secretary requiredLocal director and secretary required
LimitsNoMonthly transactions worth 6 million SGD for twoNo
Blockchain
RegulatorFINTRACMASMAS
License expiration date2 yearsTermlessTermless
Comparative chart MSB/SVF

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