From 27 September 2022 to 28 October 2022, the InfoComm Media
Development Authority (“IMDA“) and the
Monetary Authority of Singapore (“MAS“)
are conducting a consultation exercise to obtain feedback on their
proposals to strengthen participation in the Singapore Quick
Response Code Scheme (“SGQR“).
Introduced in September 2018, SGQR is the world’s first
standard for a unified payment quick response
(“QR“) code that allows multiple payment
schemes to be combined into a single SGQR label. The main aims of
SGQR are to: address the problem of having payment QR code
fragmentation; standardise payment QR code specifications; and
facilitate the interoperability of payment QR codes. Among other
advantages, SGQR has made accepting electronic payments more
efficient and convenient. Following the wide adoption of SGQR in
recent years and as the scheme matures, MAS and IMDA are looking to
increase participation in SGQR, enhance existing standards and
governance of SGQR, as well as for SGQR to be a national
electronics payments infrastructure that is financially
self-sustaining. At the same time, Singapore wants to prepare SGQR
to be interoperable to enable local and cross-border QR code
Against this background, MAS and IMDA propose:
- To introduce a set of guidelines laying out MAS’
expectations on all Relevant Merchant Acquirers who participate in
SGQR (“Proposed Guidelines“). A
“Relevant Merchant Acquirer“, under the
Proposed Guidelines, refers to any major payment institution or any
exempt payment service provider under the Payment Services Act 2019
(“PS Act”) that provides merchant
acquisition service to any merchant through a static QR code at
that merchant’s physical place of business
(“Relevant Merchant Acquisition
- To introduce a fee structure model for SGQR Members; and
- For the Banking Computer Services Private Limited
(“BCS“) to conduct regular batched
onboarding exercises for prospective merchant acquirers.
The consultation is targeted at all Relevant Merchant Acquirers,
as well as applicants for a major payment institution licence to
provide a merchant acquisition service. This Update outlines the
key points of the proposals.
Proposed Guidelines and Revision to Rules
MAS and IMDA opine that it is necessary to expand the membership
of SGQR to more merchant acquirers, including newcomers to the
merchant acquisition market, where relevant. At present, there are
31 SGQR Members. To qualify as a SGQR Member, one has to be: a
licensed payment service provider (or exempt payment service
provider) under the PS Act to carry on a business of providing a
merchant acquisition service; or a public authority. All SGQR
Members, who are also MAS-regulated financial institutions, are
contractually required to comply with rules relating to SGQR
covering governance, membership, operating, branding and
presentment protocols (“Rules“).
The Proposed Guidelines provide general guidance and
expectations concerning participation in SGQR. Among other things,
a Relevant Merchant Acquirer is required at all times to be an SGQR
Member, as well as do all things necessary to maintain the SGQR
membership and comply with all relevant rules. A Relevant Merchant
Acquirer is also not allowed to pass on any of the cost of
maintaining its SGQR membership to any user or merchant. The full
text of the Proposed Guidelines is set out at Annex B to the
consultation paper (link here).
It is proposed that the Proposed Guidelines will not apply to
standard payment institutions under the PS Act
(“SPIs“), reason being that SPIs are
generally smaller players with limited presence in the merchant
acquisition market in Singapore and thus not necessary to be
included in the scope of the Proposed Guidelines at this juncture
to achieve the intent of making SGQR the baseline standard for
static QR code payment acceptance at merchants’ physical places
of business. The other reason for excluding SPIs is to avoid
saddling smaller players with undue compliance costs.
An addition to the Rules which is proposed is to require an SGQR
Member to provide the Relevant Merchant Acquisition Service only
through an SGQR label and not with proprietary static payment QR
code labels. The aim is to reduce QR code payment fragmentation at
the merchants’ place of business.
The Proposed Guidelines and revised Rules are proposed to take
effect on 1 December 2023, i.e. at least a
three-month transition period from the targeted publication of the
response to the consultation (which is set in mid-2023).
Regarding the removal of proprietary static QR code labels at
the merchants’ physical places of business and replacement with
SGQR labels, IMDA and MAS propose to provide existing SGQR Members
with a transition period of at least six months from the effective
date of the Proposed Guidelines and revised Rules to do so.
Proposed Fee Structure Model for SGQR Members
Currently, BCS and the Financial Sector Development Fund,
administered by MAS, fully subsidise the development and operating
costs of the Central Repository. Therefore, existing SGQR Members
do not need to pay membership fees for participating in SGQR in the
first five years of the scheme (unless they request ad-hoc services
from BCS). Noting that funding support for the Central Repository
will end in July 2023 and the fact that SGQR has matured as a
scheme, in order for SGQR to be financially self-sustaining in the
long run, MAS and IMDA propose that BCS introduce a tiered fee
structure model for SGQR Members so that BCS can recover its
operating costs of the Central Repository.
The proposed fee structure model will include:
- a one-time onboarding fee of S$1,800;
- an annual account maintenance fee of S$360; and
- a tiered annual subscription fee that depends on the total
number of SGQR labels issued by the SGQR Member at the end of the
calendar year. There will be four tiers of annual subscription
fees. To encourage SGQR Members to increase their base of merchants
that use SGQR labels, the annual subscription fee per SGQR label by
the SGQR Member will be lower if more SGQR labels are generated by
that SGQR Member.
Proposed one-time fee collection
It is proposed that on the effective implementation date of the
revised Rules (targeted as 1 December 2023), BCS will collect a
one-time fee from SGQR Members who join before 1 December 2023
comprising: (i) annual account maintenance fees pro-rated on a
semi-annual basis; (ii) annual subscription fees pro-rated on a
semi-annual basis. This will not be applicable for SGQR Members who
join from January 2024 onwards.
For the next billing cycle:
- (For SGQR Members who join before 1 December 2023), fees
payable comprise: (i) annual account maintenance fees for full
one-year period; (ii) annual subscription fees for full one-year
- (For SGQR Members who join from January 2024
onwards),1 fees payable comprise: (i) one-time
onboarding fee; (ii) annual account maintenance fees for full
one-year period; (iii) annual subscription fees for full one-year
SGQR Members who join from 1 December 2023 onwards will pay the
fees outlined in the proposed fee structure model in full during
the next billing cycle. The proposed fee structure model and
details are set out at Annex C to the consultation (link here).
Regular Batched Onboarding for Prospective Merchant
Upon the introduction of the Proposed Guidelines and the
commencement of the revised Rules, more Relevant Merchant Acquirers
are expected to participate in SGQR. For structured onboarding, it
is proposed that BCS conduct regular batched onboarding exercises
(at least semi-annually) to onboard the prospective merchant
acquirers. Newly licensed Relevant Merchant Acquirers should
register as an SGQR Member in the next available onboarding
IMDA and MAS also seek comments on areas not discussed in the
consultation questions, and other suggestions to ensure SGQR’s
readiness for future cross-border connectivity.
For more information, please refer to the consultation paper and
annexes that are made available on the MAS website at this link.
Existing SGQR Members as well as prospective merchant acquirers
who intend to join SGQR should review the proposals and consider
how the proposals may impact their businesses/operations.
1. There is no onboarding of SGQR Member
planned for December 2023.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.