Besides well-known mobile wallet operators such as Grab Pay and Razer Pay, four other e-wallet operators in Singapore indicated interest in applying for the digital bank licenses that are up for grabs from August.
Liquid Group, Xfers, MatchMove, and FOMO are evaluating whether to go after the digital bank license once applications open in August, the «Business Times» (behind paywall) reported. If they choose to submit their applications, they could be competing against well-funded players such as Grab, Razer, and Singtel, which operates mobile wallets Grab Pay, Razer Pay, and Singtel Dash respectively.
Their interest reflects the operators' plans to move beyond consumer payments by offering a range of financial services targeting both individuals and businesses.
The E-wallet Operators
Liquid Group is part of a consortium of partners exploring digital wholesale banking operating payments app Liquid Pay, while Xfers operates a fintech payment platform for any digital business that wants to collect, store or send money. The latter is leaning towards the digital wholesale bank license, which will allow it to serve SMEs and other non-retail segments.
MatchMove is a fintech company that enables payment solutions across lending, corporate expense management, remittance and even allows other companies to launch their own branded payments platform within minutes.
For FOMO Pay, the license opens up opportunities to serve more merchants currently underbanked and unbanked, while giving them an easier e-KYC (know-your-customer) and digital onboarding experience.
Five Licenses
The Monetary Authority of Singapore (MAS) last month announced that it will issue up to five of such licenses, comprising up to two digital full bank licenses and up to three digital wholesale bank licenses.
Singapore's move follows the trend seen in Hong Kong, which opened its doors to virtual banks in March. Among the holders of the eight virtual banking licenses are joint ventures (JVs) between top technology companies and financial institutions.
Same Capital Requirements
Digital banks in Singapore will be subject to the same capital requirements as local banks. This means that they need to keep a specific amount of capital against loans assessed on a risk-weighted basis, in order to buffer against loan losses.
Although fintech firms often have an edge in developing the technology needed to deliver more efficient services, they lack experience in actually operating a bank, said Zennon Kapron, director of research and consultancy firm Kapronasia. That's where financial institutions can help to fill the gap, he noted.
