MAS updates e-payment guidelines to better safeguard against fraud

SINGAPORE – Consumers will be able to set their own limits for receiving transaction notifications, a mandatory feature under updated e-payment guidelines aimed at safeguarding against fraud.

In its update issued on Thursday (April 25), the Monetary Authority of Singapore (MAS) said it had originally wanted financial institutions to send alerts for every transaction above $0.01.

The guidelines will come into effect on June 30 this year and will apply to banks, insurance providers and firms with stored-value facilities. Fraud is a rising concern as more people now use e-wallets such as PayLah! and GrabPay.

First issued last September, the guidelines also contain new measures to better balance “moral hazard by the account user” – feedback from banks that surfaced during a public consultation last year – with the potentially large losses that financial institutions are exposed to.

Most e-wallets are linked to credit cards issued by banks, while some e-wallets are linked to bank accounts.

From June 30 this year, consumers will have to prove that they are not negligent in any way that could have contributed to unauthorised transactions to claim up to $1,000 from the bank.

This threshold was set as banks typically require more checks for transactions that are more than $1,000.

This new measure will place an existing blanket rule that allows consumers found to be careless but not reckless in contributing to unauthorised transactions to be liable for only up to $100.

Careless behaviour includes misplacing a mobile phone or accidentally giving away passwords, and the onus is now on banks to prove that users are reckless.

Under the new guidelines, users are also expected to provide updated contact information to banks and monitor transaction notifications to spot suspicious activities early.

Users must also have good cyber security habits such as installing the latest software updates and patches for their mobile phones and computers used in e-payments.

If unauthorised transactions are detected, users must report them as soon as possible, cooperate with the financial institutions promptly, and report the matter to the police if the institutions require police reports.

Otherwise, consumers may be liable for unauthorised transactions.

As for financial institutions, the new guidelines require them to investigate transaction disputes quickly and provide a detailed investigation report within 21 days for straightforward cases, and 45 days for complex ones.

The new guidelines will not apply to scams, which will be investigated for fraud.

They will also not apply to unauthorised payments made directly on credit cards, debit cards, and charge cards as there are existing guidelines in place for these payments.

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