Asia-Pacific

Licensing, Authorisation & Market Access

India's payment-aggregator licensing landscape has undergone its most significant consolidation to date under the RBI's Master Direction on the Regulation of Payment Aggregators, issued 15 September 2025. The Direction unifies what had previously been a fragmented set of licensing pathways spanning online, cross-border and offline aggregators into a single authorisation category, requiring registration with the Financial Intelligence Unit-India and full compliance with know-your-customer and customer due-diligence obligations for merchant onboarding. This consolidation is a bank-versus-non-bank-relevant development in its own right: the unified authorisation category applies specifically to non-bank payment institutions and e-money issuers operating as aggregators, distinguishing them from bank-operated aggregation, which continues to sit under separate prudential supervision.

The most structurally significant single element of the Direction is its treatment of offline payment aggregators, a segment that had no licensing requirement whatsoever prior to this cycle. Offline PAs became subject to mandatory RBI authorisation by 31 December 2025, converting what had been an unregulated market-access gap into a formally licensed activity for the first time. This closes a channel that had allowed offline aggregation activity to operate outside RBI's supervisory perimeter, and it represents a genuine market-access barrier for firms that had previously operated in this space without needing to satisfy any authorisation standard.

The regime's enforcement mechanism gives the licensing requirement material weight. A wind-up provision for non-compliant payment aggregators entered force on 28 February 2026, meaning firms that failed to secure the required authorisation now face a formal wind-up process rather than merely an advisory compliance gap. This is a genuinely consequential enforcement lever: it converts the licensing requirement from a paperwork exercise into an existential compliance deadline for any aggregator, online, cross-border or offline, that has not secured authorisation.

A further dimension of the reform ties market-access licensing directly to financial-crime-adjacent obligations. Non-bank payment aggregators, including payment aggregator-payment gateway hybrid entities, are now explicitly classified as reporting entities required to register with FIU-IND under the Prevention of Money Laundering Act, 2002. While the substantive AML/CFT analysis of this classification sits with the financial-integrity monitor, the market-access consequence is squarely a W1a matter: non-bank PAs now carry a compliance obligation, PMLA reporting-entity registration, that did not previously attach to their market-access licence, effectively bundling AML registration into the authorisation pathway itself.

Singapore's contribution to this cycle's W1a picture is enforcement-driven rather than rulemaking-driven. The Monetary Authority of Singapore revoked the Major Payment Institution Licence held by Bsquared Technology Pte Ltd, effective 14 May 2026, under the Payment Services Act 2019, barring the firm from providing digital payment token services. This is a direct licence-revocation action against a non-bank payment institution operating in the digital-payment-token space, and it demonstrates that MAS is prepared to exercise its revocation power against PS Act licensees for non-compliance rather than relying solely on softer supervisory measures.

Taken together, India and Singapore represent two distinct but complementary tightening vectors within the same reporting window: India through comprehensive rulemaking that closes a previously unregulated market segment and attaches new AML-adjacent obligations to market access, and Singapore through direct enforcement against an existing non-bank licensee. Both actions raise the compliance bar for non-bank payment institutions and e-money issuers operating in these markets, while bank-operated payment infrastructure in both jurisdictions continues to sit under a separate, and in this cycle unaffected, prudential supervisory track.

Outlook

The most consequential near-term date for India's W1a landscape is not a licensing deadline but an enforcement one: firms that have not secured authorisation under the unified aggregator category already face wind-up exposure as of 28 February 2026, and that exposure will only sharpen as RBI works through its enforcement docket against non-compliant aggregators. Singapore's revocation of Bsquared Technology's licence should be read as a signal that MAS is willing to use its full enforcement toolkit against PS Act licensees operating in the digital-payment-token space, a posture that other non-bank PS Act licensees operating adjacent services should note as they assess their own compliance exposure.

Conduct, Safeguarding & Financial Promotions

Conduct and financial-crime-control obligations expanded across three jurisdictions. In Australia, AUSTRAC's AML/CTF Act Tranche 2 reforms bring real estate agents, lawyers and accountants into scope as reporting entities from 1 July 2026, with civil penalties up to AUD 36.4 million for corporates. The Federal Court of Australia ordered civil penalties against Castra Licensee Pty Ltd (AUD 50,000 plus 15,000 costs) and Princeton Securities (NSW) Pty Ltd (AUD 45,000 plus 5,000 costs) on 26 May 2026 for AML/CTF Act contraventions — both non-bank payment-institution licensees. AUSTRAC separately finalised Sportsbet's enforceable undertaking, first required in 2024 to uplift systems, controls and governance, after a separate AUD 313,000 fine for social-responsibility failures. In India, the Reserve Bank of India's 2025 PA Directions mandate CKYCR use for merchant onboarding, replacing prior KYC Master Direction compliance, with legacy-merchant re-onboarding required from 1 January 2026 — a conduct obligation sitting on the non-bank payment-aggregator perimeter. In Singapore, MAS is understood to be urging financial institutions to strengthen defences against AI systems capable of autonomously discovering and exploiting vulnerabilities, per its 2026/27 supervisory-priorities agenda; this reading rests on a single lower-tier compliance-vendor source with no primary MAS document retrieved.

Outlook

Watch for AUSTRAC's first Tranche 2 enforcement actions against newly-scoped real estate, legal and accounting reporting entities after the 1 July 2026 commencement, and for confirmation of the MAS AI-vulnerability messaging in a primary supervisory document.

Stablecoins & Digital Money

Two jurisdictions advanced stablecoin regulatory frameworks this cycle. The Hong Kong Monetary Authority granted Hong Kong's first two stablecoin issuer licences under the Stablecoins Ordinance to Anchorpoint Financial Limited and HSBC, effective 10 April 2026 — both licences went to bank-affiliated or bank entities rather than pure-fintech issuers. Japan's Financial Services Agency finalised revised Funds Settlement Act rules covering stablecoins, crypto intermediaries and funds-transfer businesses, effective 1 June 2026, and separately submitted a bill reclassifying crypto assets under the Financial Instruments and Exchange Act.

Outlook

Watch for further HKMA stablecoin issuer licence grants, expected progressively through the fourth quarter of 2026, and for the practical effect of Japan's foreign-stablecoin recognition pathway once the revised Funds Settlement Act rules take effect.

Payment Corridor Dynamics

Australia is the entire substance of this module this cycle, and the material is substantively dense. The Reserve Bank of Australia Conclusions Paper on Merchant Card Payment Costs and Surcharging, published 31 March 2026, sets out a package of reforms taking effect on 1 October 2026: interchange caps are lowered, a cap on foreign-issued card interchange is introduced for the first time, the long-standing prohibition on merchants adding surcharges is lifted, and schemes and large acquirers face a new fee-transparency disclosure mandate (wpm-2026-W5-001). This is a tier-one primary regulator publication and the single most consequential corridor-level repricing decision in the region this cycle, directly affecting the cost structure of card-based payments between merchants, acquirers, issuers and card schemes operating in the Australian domestic corridor.

Industry analysis citing the Reserve Bank figures translates the reform into concrete magnitude: the interchange-cap reduction is estimated to cut merchant payment costs by approximately AUD 910 million annually, removing surcharges entirely could save consumers up to AUD 1.6 billion a year, and issuer interchange revenue is projected to fall by roughly AUD 660 million annually as a result of the combined package (wpm-2026-W5-002). These figures should be read as an industry estimate built on the Reserve Bank's underlying data rather than as a Reserve Bank forecast in its own right, since the source for the specific dollar figures is a single tier-four industry-analysis publication rather than the Reserve Bank paper directly, even though the direction and general order of magnitude are consistent with the Reserve Bank's own published reasoning for the reform.

The reform is not the end of the Reserve Bank's current payments-regulation agenda. The Bank has separately opened a follow-on Review of Payments System Regulation, publishing an Issues Paper with submissions closing 7 August 2026; the Bank intends to publish its regulatory priorities arising from that review by the end of 2026, with further consultation on prioritised issues to follow by mid-2027 (wpm-2026-W5-003). This is a second tier-one primary source and establishes that the surcharge and interchange reform, substantial as it is, is one stage in a longer regulatory programme rather than a single concluded exercise. The corridor-dynamics implication is that further rule changes affecting card-payment costs and structure in the Australian market should be expected to continue emerging through 2026 and into 2027, on a timeline the Reserve Bank has now itself set out.

The net effect of the March 2026 reform, taken together with the June 2026 review announcement, is a reallocation of payment-system economics away from card issuers and toward merchants and consumers, occurring through a regulator-led process rather than through competitive or commercial dynamics alone. For payment service providers and acquirers operating in the Australian corridor, the immediate planning horizon runs to 1 October 2026, when the interchange and surcharge changes take effect, while the medium-term planning horizon extends through the Review of Payments System Regulation timeline into 2027.

Outlook

The most immediate item to track is implementation of the 1 October 2026 effective date itself: whether schemes, acquirers and merchants complete the systems and contractual changes the reform requires on schedule, and whether the fee-transparency disclosure mandate produces publicly visible changes in how large acquirers present their pricing. Beyond that date, the Review of Payments System Regulation is the structural item to watch through the remainder of 2026 and into 2027, since the Reserve Bank has committed to publishing regulatory priorities by year end that will shape the next phase of Australian payments regulation beyond the card-cost reforms already locked in.

Merchant Acquiring & Risk

India's merchant-acquiring due-diligence standard has been fundamentally reset alongside the broader payment-aggregator licensing overhaul. Under the new regime, payment aggregators must apply full merchant know-your-customer procedures, per the RBI's 2016 KYC Directions, to all merchants with the sole exception of small merchants, who continue to be subject to a lighter-touch standard. This converts what had previously been a variably applied due-diligence practice across the aggregator market into a uniform, RBI-mandated floor that applies consistently regardless of which aggregator a merchant uses.

The most structurally significant element of the new standard is the designation of the Central KYC Registry as the mandatory first port of call for retrieving merchant KYC records. Rather than allowing aggregators to build or rely on their own independent KYC verification processes as the primary mechanism, the regime now requires that CKYCR retrieval be attempted first, with other verification methods presumably available only where CKYCR does not hold the relevant record. This is a meaningful architectural shift in how merchant-onboarding due diligence is conducted: it centralises the initial verification step through a shared national registry rather than leaving it to each aggregator's independently built compliance infrastructure, likely reducing duplication of verification effort across aggregators handling the same merchants while also standardising the baseline quality of the KYC record relied upon.

The practical rollout of this new standard is being managed through a defined transitional compliance window rather than an immediate universal requirement. Merchants onboarded before 31 December 2025 have until 15 September 2026 to be brought fully into line with the new due-diligence standard. This grace period gives aggregators a substantive runway to remediate their existing merchant books, rather than facing an immediate compliance cliff across their entire portfolio the moment the new standard took legal effect. The distinction between newly onboarded merchants, who must comply from the outset, and legacy merchants, who benefit from the transitional window, is itself a notable feature of how RBI has chosen to sequence enforcement intensity.

From a merchant-acquiring risk perspective, this reform materially changes the risk profile of aggregator-merchant relationships established before the new standard took effect. Aggregators carrying legacy merchant books that have not yet been remediated to the new CKYCR-first standard carry a defined, dated compliance exposure that will crystallise at the 15 September 2026 grace-period deadline. This creates a clear operational milestone against which acquiring-risk functions should be measuring their remediation progress over the remainder of the transitional window.

Outlook

The 15 September 2026 grace-period deadline is the key date to track for India's merchant-acquiring risk landscape. At that point, the CKYCR-first merchant-KYC standard becomes universally binding across the entire aggregator merchant book, including all legacy relationships established before 31 December 2025, not merely newly onboarded merchants. Aggregators that have not completed systematic CKYCR-first remediation of their existing merchant portfolios by that date will face a materially different compliance posture than those that have used the transitional window effectively, and this gap is likely to become visible in RBI's subsequent supervisory engagement with the sector.

Product Innovation & Market Development

Australia's New Payments Platform processed over 1.3 billion transactions worth more than AUD 1.5 trillion in FY2022/23, but handles only around a quarter of account-to-account payments by number, with PayID/PayTo adoption constrained pending resolution of the liability and dispute-resolution framework. This reading rests on a single tier-4 industry-analysis source and is flagged as thin signal.

Outlook

Watch for RBA/AusPayNet primary documentation on the PayID/PayTo liability and dispute-resolution framework, which is the binding constraint on further instant-rail adoption.

Commercial Intelligence (M&A, Investment & Product)

Hong Kong's first stablecoin issuer licences double as the cycle's most significant commercial product event. Anchorpoint Financial Limited — a joint venture of Standard Chartered Bank (Hong Kong), HKT and Animoca Brands — was granted a Hong Kong stablecoin issuer licence alongside HSBC on 10 April 2026, marking the first two grants under the Stablecoins Ordinance; deal/financing terms for the joint venture were not publicly disclosed. HSBC plans to launch a Hong Kong-dollar-denominated stablecoin in the second half of 2026 under its new licence, leveraging tokenised-deposit and HSBC Orion infrastructure; commercial terms for this planned launch were not publicly disclosed.

Outlook

Watch for HSBC's HKD stablecoin launch in the second half of 2026 and for whether further HKMA stablecoin licensing rounds bring additional bank-led or joint-venture issuers to market.