Singapore, December 18, 2023... The Monetary Authority of Singapore (MAS) today issued a Warning order authorized payment service providers providing cross-border money transfer services (remittance companies) to suspend for the next three months the use of non-banking and non-card channels when transmitting money to persons in the People's Republic of China (PRC ).
2 Specifically, when providing cross-border money transfer services to individuals to China, remittance companies in Singapore can only contract with a bank or card network operator (e.g. Union Pay International), or an authorized financial institution who has contracted a bank or an operator. of a card network, to assist in the transmission of money. This restriction will last for three months, from January 1, 2024 to March 31, 2024. It comes after reports that remittances to China made by people (mostly PRC nationals working here) to through remittance companies in Singapore were subsequently frozen in the bank of their beneficiaries. accounts in China.
3 To keep transaction costs low for customers, remittance companies hire third-party overseas agents, rather than banks, to complete the remittance from Singapore to China. In the vast majority of cases, money sent through these channels is successfully deposited into the recipients' bank accounts in China.
4 However, in recent months, for a very small proportion of such remittances, PRC law enforcement agencies have frozen the money received in recipients' bank accounts. It is unclear why these funds were frozen. However, to minimize the risks for consumers sending funds to China, MAS has decided to temporarily suspend the use of non-banking and non-card channels by remittance companies for money transfers to China. While customers may now have to pay more to send funds to China, this suspension is necessary for the immediate protection of consumers and to curb the number of new reported cases of beneficiary account freezing in China.
5 MAS has been actively engaging the remittance companies involved. We have told them to provide necessary assistance to affected customers and strengthen their complaint handling process. We have also ordered them to review their existing agreements with partners for the PRC remittance corridor, in light of these complaints and the impact on their customers.
6 The temporary suspension of the use of non-banking and non-card channels will take effect 14 days from the date of the notice, January 1, 2024. The 14-day period allows time for remittance companies to make the necessary changes to their existing practices and that existing remittances are completed.
7 MAS warns the public not to rush to send money to China through third-party agents abroad during this 14-day period. People should use other channels to send remittances to China, such as through banks or card networks, to avoid any inadvertent freezing of money or accounts. These channels are offered by remittance companies and remain available to customers.
8 The MAS will continue to closely monitor the situation and practices of remittance companies. MAS may end or extend the suspension after March 31, 2024 or adopt new measures as appropriate.
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