Singapore: MAS Proposes Mandatory FIDReC Membership for PSPs
The Monetary Authority of Singapore (MAS) has proposed a new regulation requiring Payment Service Providers (PSPs) to join the Financial Industry Dispute Resolution Centre (FIDReC) as a mandatory member. This move is part of the MAS's efforts to enhance consumer protection and provide a more accessible and affordable dispute resolution mechanism for customers of PSPs.
Currently, FIDReC is an independent and impartial dispute resolution body that handles consumer disputes involving Financial Institutions (FIs). While all classes of FIs serving retail customers are required to subscribe to FIDReC, PSPs were exempt from this requirement when they transitioned into the new licensing regime in 2020. However, with the introduction of the Shared Responsibility Framework (SRF) in 2024, PSPs offering electronic wallets were required to subscribe to FIDReC as part of the SRF's dispute resolution mechanism.
The proposed regulation aims to extend the requirement for PSPs to subscribe to FIDReC, allowing customers of PSPs to file eligible disputes with FIDReC for resolution. The scope of eligible complainants includes individuals, sole proprietors, charities, and small businesses that are customers of FIDReC subscribers. This move is intended to provide a more comprehensive and accessible dispute resolution mechanism for customers of PSPs, who may experience disputes arising from service lapses, misrepresentations, misconduct, or apportionment of liability.
MAS also proposes to introduce a new limb under the Second Schedule of the DRS Regulations to extend the requirement to Systemically Important Payment Institutions (SPIs) and Major Payment Institutions (MPIs). Additionally, MAS-regulated stablecoin issuers will be required to subscribe to FIDReC after the stablecoin regulatory regime comes into force.
MAS will engage with the industry to finalize the fee structure for FIDReC membership, which will include the following principles: transparency, fairness, and proportionality. The onboarding of SPIs and MPIs onto FIDReC is expected to be a significant exercise, and MAS has recognized the need to provide sufficient time for coordination between PSP entities and FIDReC.
