http://www.singaporelawwatch.sg/slw...ypal-told-to-end-personal-money-transfer.html
PayPal told to end personal money transfer
Source
Straits Times
Date
22 Feb 2013
Author Charissa Yong
MAS says it is not licensed to do this; commercial transactions not affected
ONLINE payments giant PayPal has been told to stop providing a service that allows its users in Singapore to wire money to one another, or overseas, for personal transactions.
PayPal does not have the required remittance licence to do so, said the Monetary Authority of Singapore (MAS) yesterday.
The MAS ruling, which took effect from Wednesday, does not affect online shoppers who can still use PayPal to pay for goods and services they purchase from Internet merchants.
These are considered "commercial payments", which PayPal-registered merchants have to pay a fee to receive. The fee is 2.4 to 3.9 per cent of the total sales amount, plus a 50-cent fee per transaction.
The ruling does, however, affect anyone in Singapore who uses PayPal to send a cash gift, personal donation or payment to another individual PayPal user.
These "personal payments" are cheaper and some are even free, as long as no currency conversion is required.
On Tuesday, PayPal informed Singapore customers via e-mail that personal payments would no longer be available from the next day onwards.
By the end of Wednesday, the service had been removed from the site.
Local PayPal users, however, can still receive personal funds that users outside Singapore send, said the company.
Responding to queries from The Straits Times, an MAS spokesman said that PayPal was instructed to stop offering its personal payments service because it was not licensed to do so.
In Singapore, offering personal payments without any reference to underlying goods or services requires a remittance licence.
"Following our discussions with the regulator, we have turned off our personal payments service for our users in Singapore," said PayPal.
"We take compliance very seriously and work closely with regulators all over the world."
Asked if it would now seek a remittance licence, PayPal said that it does not comment on future products and services.
But it added that it will continue to focus on online and mobile payment for commercial transactions.
PayPal also did not give figures on the number of users here, the annual volume of transactions or the proportion of personal to commercial payments.
One PayPal user who has been affected by the change is Ms Joyce Chng, 37, who writes fantasy and science fiction novels and used to receive her royalties via PayPal's personal payments.
"I suspect many freelancers, especially artists and writers, work with overseas clients, and online payment systems make it easier for clients to pay. I am looking for alternatives," she said.
Also affected are smaller merchants who may have chosen to transact using PayPal's personal payments system to avoid incurring transaction fees associated with bank transfers.
GameTraders.SG founder Jax Xie, 27, said that donors to his website, which began in 2010, had often used PayPal.
"Given the two methods of donation, PayPal is generally preferred by donors compared to bank transfers due to its ease of use and privacy," said Mr Xie.
PayPal customers do not need to reveal their bank account details to the other party. PayPal also does not require two-factor authentication for money transfers.
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