Discussion Paper - Payment Services Provider Regulatory Framework (2025-04-15)

Summary

This is a Discussion Paper issued by the Bermuda Monetary Authority (BMA) setting out preliminary proposals for a new Payment Services Act (PSA) that would replace the Money Service Business Act 2016. It is an early-stage consultation, not draft legislation, and invites stakeholder feedback to shape a future Consultation Paper later in 2025. No new legal obligations are yet in force; the paper describes the direction the BMA intends to take.

• Digital Wallet Providers: Entities issuing or administering payment products that store value electronically or on a device for later use in payments, transfers or withdrawals.
• Payment-Handling Providers: Entities receiving and handling money or monetary value from payers to transmit equivalent amounts to payees, including merchant acquirers, remittance providers, currency exchange and settlement intermediaries.
• Payment Technology Providers: Entities providing technology that enables payment transactions (authentication, routing, credential transfer) without holding or controlling customer funds.
• Proposed licensing regime: No person could conduct PSP business in or from Bermuda without a BMA licence; unlicensed activity would be a criminal offence.
• Proposed Minimum Criteria for Licensing: Fit and proper requirements for controllers/officers, prudent conduct including AML/CFT and sanctions compliance, corporate governance, and integrity/skill standards.
• Proposed ongoing supervision: Risk-based oversight including periodic returns, prudential and capital requirements, and on-site/off-site examinations.
• Exclusions and exemptions under discussion: Proposed carve-outs include intra-group treasury transactions, payment system settlement activities, payroll services and loyalty schemes.

The BMA is seeking industry input on the scope of these categories, proposed exclusions and exemptions, and any emerging payment activities not yet captured, via a series of numbered consultation questions (Q1 to Q9) embedded in the paper.

Key obligations

• Stakeholders wishing to comment must submit feedback on the Discussion Paper's proposals and questions to fintech@bma.bm by close of business on 15 May 2025.

Applies to

Payment Services Providers (proposed category), Digital Wallet Providers, Payment-Handling Providers, Payment Technology Providers, Money Service Businesses currently licensed under the Money Service Business Act 2016

Deadlines

• 15 May 2025: Deadline for industry and stakeholders to submit comments on the Discussion Paper's proposals and questions to fintech@bma.bm.