The parties to the application are the members of the Singapore Clearing House Association (“SCHA”) who are participants to FAST, also known as “Fast and Secure Transfers”, which is an electronic funds transfer system that enables customers of participants to transfer Singapore Dollar funds from one to another in Singapore almost instantly. The participants, as of the date of the application are as set out in the table below (collectively, the “Parties”):
- Australia and New Zealand Banking Group Limited;
- Bank of China;
- The Bank of Tokyo-Mitsibishi UFJ;
- BNP Paribas;
- CIMB Bank;
- Citibank NA and Citibank Singapore Limited;
- DBS Bank Ltd / POSB;
- Deutsche Bank AG, Singapore;
- HL Bank Singapore;
- The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch and HSBC Bank (Singapore) Limited;
- ICICI Bank Limited;
- Industrial and Commercial Bank of China Limited;
- JPMorgan Chase Bank, N.A.;
- Maybank Singapore Limited and Malaysian Banking Berhad;
- Mizuho Bank, Ltd.;
- Oversea-Chinese Banking Corporation Limited;
- RHB Bank Berhad;
- Standard Chartered Bank (Singapore) Limited;
- Sing Investments & Finance Ltd;
- State Bank of India;
- Sumitomo Mitsui Banking Corporation;
- Trust Bank Singapore Limited;
- United Overseas Bank Limited;
- GPay Network (S) Pte Ltd;
- Liquid Group Pte. Ltd.;
- MatchMove Pay Pte Ltd;
- SingCash Pte Ltd;
- Wise Asia-Pacific Pte. Ltd;
- Xfers Pte Ltd; and
- Singapore Clearing House Association;
Summary of Transaction:
Note: The summary information posted on this Public Register on the nature and objectives is provided by the Parties. CCCS makes no representation as to the accuracy or veracity of the summary information posted.
The subject of this application is Rule 27.23 of the SCHA Bye-Laws (“Rule 27.23”) and the corresponding guidelines accompanying Rule 27.23 (“Guidelines”).
On 30 November 2020, the Monetary Authority of Singapore (“MAS”) announced that eligible non-bank financial institutions (“NFIs”) will have direct access to the banking system’s retail payments infrastructure, i.e. FAST, from February 2021. NFIs currently have access to FAST. NFIs that are licenced as major payment institutions under the Payment Services Act 2019 are allowed to connect directly to FAST.
Rule 27.23 was introduced, amongst other things, in the SCHA Bye-Laws, to govern NFIs’ admission to, and use of, FAST. Rule 27.23 and the Guidelines restrict FAST users from allowing their e-wallet users to cash out funds in their e-wallets through FAST, when the funds are sourced from unsecured credit card facilities issued in Singapore (“Restricted Funds”), therefore allowing their e-wallet users to obtain cash advances from unsecured credit card facilities, which may have potential adverse commercial and public policy implications. This includes prohibiting Restricted Funds from being transferred from e-wallets to bank accounts of non-Merchants and to other e-wallets on other platforms.
Rule 27.23 and the Guidelines are intended to avoid the potential adverse commercial and public policy implications of NFI users being able to cash out Restricted Funds in their e-wallets which is a form of cash advance and unsecured borrowing from credit cards issued in Singapore.
Rule 27.23 and the Guidelines do not directly impact the ability of consumers to use e-wallets to purchase goods and services. However, as Rule 27.23 and the Guidelines prohibit transfers of Restricted Funds to non-merchants’ bank accounts and other e-wallets, this, from a consumers’ and merchants’ perspective, could affect how e-wallets can be used.
SCHA submits that the only affected service is the transfer of Restricted Funds from e-wallets to non-Merchant Bank Accounts or another e-wallet (from a different e-wallet provider) via FAST. The affected product, which is affected by the restriction in Rule 27.23 and the Guidelines, are e-wallets which accept credit card top-ups. These are the only products and services which are the subject of the restrictions in Rule 27.23 and the Guidelines.
SCHA observes that there are a multitude of alternative payment methods available for the payment for goods and services in Singapore, including cash, cheques, interbank GIRO, credit cards, debit cards, telephone banking, mobile banking, internet banking, e-wallets (not via FAST), and FAST transfers (separate from e-wallets). The list of payment methods is not closed, and new methods of payment may emerge in the future.
CCCS has assessed that Rule 27.23 and the Guidelines, if carried into effect, fall within the scope of the exclusion under Paragraph 7 of the Third Schedule of the Competition Act 2004 and will not infringe the section 34 prohibition.
The Decision was issued on 8 December 2022.
Read the Grounds of Decision.