MAS Directs Suspension of China Remittances via Non-Bank Channels

174

The Monetary Authority of Singapore (MAS) has issued a Notice instructing licensed payment service providers offering cross-border money transfer services to suspend the use of non-bank and non-card channels when transmitting money to individuals in the People’s Republic of China (PRC) for the next three months.

Specifically, remittance companies in Singapore providing cross-border money transfer services to China are restricted to engaging only a bank, a card network operator (e.g., Union Pay International), or a licensed financial institution that has engaged a bank or a card network for the transmission of money. This restriction is effective from January 1, 2024, to March 31, 2024. The decision follows reports of individuals’ remittances to China through Singaporean remittance companies being frozen in beneficiaries’ bank accounts in China.

To minimize risks and protect consumers, MAS has temporarily suspended the use of non-bank and non-card channels by remittance companies for money transfers to China. This measure is aimed at immediate consumer protection and to curb the incidence of beneficiaries’ accounts in China being frozen. While this may lead to higher transaction costs for customers, it is considered necessary for consumer safeguarding.

MAS has been actively engaging with the remittance companies involved, instructing them to assist affected customers, enhance complaints handling processes, and review existing arrangements with partners for the PRC remittance corridor. The temporary suspension will take effect 14 days from the date of the notice, allowing remittance companies time to adjust their practices and complete existing remittances.

During this 14-day period, the public is advised against hastily remitting funds to China through overseas third-party agents. Alternate channels, such as banks or card networks provided by remittance companies, remain available to customers. MAS will closely monitor the situation and practices of remittance companies, with the possibility of terminating or extending the suspension after March 31, 2024, or implementing further measures as deemed appropriate.