The Bermuda Monetary Authority (BMA) published a discussion paper setting out initial proposals to modernise Bermuda’s regulation of payment services providers and to define the intended regulatory perimeter. The paper outlines a potential Payment Services Act that would replace the Money Service Business Act 2016 and move to a more consistent, risk-based regime aligned with international principles, while streamlining licensing through clearer categories. The proposals bring three types of payment service providers into scope: Digital Wallet Providers that receive and store prepaid value for later payments or transfers, Payment-Handling Providers that receive and handle money or monetary value to transmit equivalent amounts to payees (often involving temporary custody and, where relevant, foreign exchange), and Payment Technology Providers that enable payment transactions and the secure transfer of payment credentials without holding or controlling customer funds. A licensing requirement would apply to PSP business conducted in or from Bermuda, with unlicensed activity treated as a criminal offence, and a tiered structure would be introduced comprising Class T (testing, up to 12 months), Class M (modified, typically 12 to 24 months), Class F (full), and Class PG (professional grade) for operators serving businesses, institutions, or high-net-worth individuals, with Class T and M expected to be subject to restrictions and disclosure of licence class. The paper also outlines exclusions and exemptions, including certain regulated financial institutions and specified activities such as commercial agent arrangements, physical cash transport, certain payment network activities, intra-group treasury payments, payments within payment or securities settlement systems, payroll services, and loyalty schemes. Feedback is requested by 15 May 2025, with the BMA planning to publish a consultation paper later in 2025 reflecting stakeholder input and refined proposals.
Bermuda Monetary Authority 2025-04-15
Bermuda Monetary Authority launches discussion on a new payment services provider framework with tiered licensing
The Bermuda Monetary Authority released a discussion paper proposing a new Payment Services Act to replace the Money Service Business Act 2016, aiming for a risk-based regulatory framework aligned with international standards. The proposals include licensing requirements for Digital Wallet Providers, Payment-Handling Providers, and Payment Technology Providers, with a tiered licensing structure. Exclusions and exemptions are outlined for certain financial institutions and activities, with feedback requested by 15 May 2025.