Opening Bank Account For Major Payment Institution In Singapore

Navigating the complexities of opening bank accounts for a Major Payment Institution (MPI) can be daunting, but it's a crucial step towards ensuring operational efficiency and payment route diversity. This guide aims to demystify the process, focusing on the importance of selecting the right types of accounts and adhering to regulatory requirements, specifically for entities operating within or targeting markets that involve large-scale payment processing.

A Major Payment Institution is a significant player in the financial services sector, providing payment services on a larger scale than smaller entities. These institutions are subject to stringent regulatory oversight, often by bodies like the Financial Conduct Authority (FCA) in the UK or the Monetary Authority of Singapore (MAS), to ensure the integrity and stability of financial transactions.

Why MPI Needs An Operational Bank Account?

An operational bank account is vital for an MPI to manage its own funds separately from those of its customers, which is essential for both regulatory compliance and operational integrity. Such accounts are typically used for managing day-to-day business expenses, including employee salaries, office rentals, utility bills, and other overhead costs.

Operational accounts are strictly for the institution's funds and must not be used for handling client monies. Instead, MPIs are required to maintain distinct accounts for safeguarding client funds and processing client transactions, namely safeguarding accounts and client money accounts.

For assistance in opening an operational bank account for your MPI, you can fill out our contact form and we will share a list of banks that can open such account.

Opening Safeguarding Account For MPI

A safeguarding account is designed to protect customer funds by keeping them separate from the institution's operational funds. This is a critical requirement for MPIs to ensure customer protection and trust. Opening a safeguarding account requires partnering with a duly licensed banking institution and navigating the regulatory landscape to meet both local and international standards.

For MPIs operating in various jurisdictions, the challenge often lies in meeting diverse regulatory requirements and securing approval for safeguarding accounts. Our expertise spans working with banks globally to facilitate the opening of multi-currency safeguarding accounts for MPIs, ensuring compliance and operational efficiency. If you would like to explore safeguarding account opening for your MPI, contact us.

Opening Client Money Account For Major Payment Institution

Client money accounts, also known as third-party payment accounts or correspondent accounts, are essential for MPIs to process payments on behalf of their clients efficiently. These accounts enable the institution to offer comprehensive payment services, including currency exchange and international payments, enhancing their service offerings to clients worldwide.

Newly established MPIs may initially opt for pooled accounts due to their lack of a business track record. However, correspondent accounts offer the advantage of issuing named client IBANs, allowing clients to transact under their own company names, which enhances transparency and trust.

We strongly advise pursuing client money accounts with API connectivity to facilitate efficient, scalable payment processing that meets the evolving needs of your business and your clients.

If you would like to get an up to date list of banks that can offer Client Money Accounts for your MPI, fill out our contact form and we will send it to you by email.

Standard Onboarding Pack for Major Payment Institution

To streamline the onboarding process with banks, MPIs should prepare a comprehensive pack of documents and information, including:

- Certificate of Registration or Incorporation

- Memorandum and Articles of Association or equivalent corporate documents

- Official list of directors and shareholders

- Identification documents for all UBOs and authorized signatories

- Proof of business trading address

- Regulatory license number

- Financial statements or business bank statements

- AML/KYC/CDD policies and procedures

- Recent external AML audit reports

- Detailed information on AML governance arrangements, customer due diligence files, and customer risk assessment methodologies

- Periodic external AML audits may be required

Adhering to the bank's requests and providing detailed information will enhance the likelihood of a successful onboarding process for your MPI.

How Major Payment Institutions Benefit from Banking Redundancy

Major Payment Institutions gain significant operational resilience and regulatory compliance advantages by implementing banking redundancy—maintaining multiple banking relationships across different jurisdictions. This approach ensures uninterrupted payment processing even if one banking partner faces technical issues, compliance reviews, or account restrictions.

Banking redundancy also enables MPIs to optimize transaction routing for lower costs, better FX rates, and faster settlements. According to a 2024 Deloitte fintech report, payment companies with at least two primary banking partners experienced 34% fewer service interruptions compared to those relying on a single bank.

Furthermore, the Monetary Authority of Singapore (MAS) highlights in its MPI licensing guidelines that diversified banking arrangements strengthen customer fund safeguarding and mitigate counterparty risk. In a global payments landscape increasingly shaped by de-risking and stricter compliance, banking redundancy is no longer optional for MPIs—it is a critical strategic advantage.

How Major Payment Institutions Use Nested Payments While Maintaining Compliance

Major Payment Institutions often use nested payment arrangements—where their transactions are processed through intermediary banking partners or correspondent networks—to expand geographic reach and offer multi-currency payment services without maintaining direct accounts in every market. This structure is common for enabling cross-border payments, card settlements, and alternative payment methods at scale.

However, nested payments come with heightened regulatory scrutiny due to the layered nature of the transaction chain. The Bank for International Settlements (BIS) warns that inadequate oversight in nested payment structures can expose institutions to money laundering and sanctions risks. A 2023 PwC global payments compliance survey found that 68% of MPIs using nested arrangements enhanced their AML frameworks in the past two years to meet regulator expectations.

Conclusion

Opening and managing bank accounts for a Major Payment Institution involves navigating a complex regulatory environment and meeting specific financial and operational requirements. By establishing operational, safeguarding, and client money accounts, MPIs can ensure regulatory compliance, protect customer funds, and facilitate efficient payment services. The process demands meticulous preparation and understanding of both regulatory obligations and banking procedures.