Singapore has launched cross-border real-time payments and cross-border quick response (QR) payments with Malaysia and Indonesia, respectively.
On Nov 17, the Monetary Authority of Singapore (MAS) announced that it had jointly launched a real-time payment systems linkage between Singapore’s PayNow and Malaysia’s DuitNow with Bank Negara Malaysia (BNM), as well as a cross-border QR payment linkage in collaboration with with Bank Indonesia (BI).
The initiative with Malaysia follows the QR payment linkage announced on March 31 which enabled cross-border QR payments to merchants. MAS managing director Ravi Menon and BNM governor Abdul Rasheed Ghaffour marked the launch of real-time payments by executing live cross-border fund transfers to each other at the Singapore FinTech Festival (SFF) 2023.
The PayNow-DuitNow linkage enables instant, secure and cost-effective P2P fund transfers and remittances between the two countries. This real-time payment systems linkage is also the first to include the participation of non-bank financial institutions from both countries, providing access to a broader group of users.
Consumers of participating financial institutions are now able to send and receive funds of up to $1,000 or RM3,000 daily by using the recipient’s mobile phone number or VPA.
The service will be made available to Singapore customers of Liquid Group, Maybank Singapore, OCBC and UOB under a phased approach, through which these institutions will progressively increase the number of eligible user groups from today until end-January 2024 to support customers' familiarisation with the service.
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For users in Malaysia, the service will first be available for all CIMB, Maybank and TNG Digital users, with other financial institutions gradually onboarded thereafter.
Singapore’s DBS and Malaysia’s Hong Leong Bank will join the programme at a later stage.
According to MAS and BNM, the PayNow-DuitNow linkage is an important milestone in improving the cost, speed, access and transparency of cross-border payments, with users from both countries set to benefit from the linkage’s cost-effectiveness, inclusivity and accessibility.
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It is also aligned with the objectives of the ASEAN Payment Connectivity Initiative and the G20 Roadmap for Enhancing Cross-border Payments. In 2022, P2P and remittance transactions between the two countries stood at $2.3 billion or RM7.8 billion.
Menon of MAS said: “The PayNow-DuitNow linkage is the culmination of a shared aspiration by Singapore and Malaysia to facilitate cross-border payments between the two countries. This linkage represents another step towards Asean’s vision for regional payments interconnectivity.”
“Cross-border payments that are fast, secure and cost-efficient can provide immense benefits especially for individuals and small businesses in countries with very close economic ties such as Malaysia and Singapore. The PayNow-DuitNow linkage enables us to reap these benefits towards our shared growth and prosperity, while laying the foundations for scalable cross-border payment networks across and beyond Asean,” added BNM’s Ghaffour.
QR payments launched with Indonesia
In a separate announcement on Nov 17, MAS launched the cross-border QR payment linkage between Indonesia and Singapore which enables customers of participating financial institutions to make seamless cross-border retail payments using their existing mobile banking applications to scan QRIS (Quick Response Code Indonesian Standard) or NETS QR codes displayed by merchants in Indonesia and Singapore respectively.
The participating financial institutions for the linkage with Indonesia from Singapore are OCBC and UOB, with DBS joining at a later stage. Participating financial institutions from Indonesia are PT Bank Central Asia Tbk, PT Bank CIMB Niaga Tbk, PT Bank Pembangunan Daerah Bali, PT Bank Permata Tbk, PT Bank Syariah Indonesia Tbk, PT Bank Mega Tbk, PT Bank Sinarmas Tbk, PT Bank Rakyat Indonesia Tbk, PT Espay Debit Indonesia Koe, PT Netzme Kreasi Indonesia.
BI governor Perry Warjiyo and MAS’ Menon jointly launched the linkage by making live cross-border QR payments at the SFF 2023.
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According to MAS and BI, the cross-border QR payment linkage is a significant milestone in their efforts to promote greater integration of the digital economy and financial ecosystem, as well as to boost economic connectivity between Indonesia and Singapore.
With greater payment convenience, this linkage can enable micro and small businesses to tap into a new pool of customers in each other’s economies. It will also benefit a significant number of travellers between the two countries, with travel rebounding post-pandemic, say the two central banks.
MAS and BI have also signed a letter of intent (LOI) to establish a local currency settlement framework. When operationalised in 2024, the framework will facilitate the settlement of cross-border payments, including QR payments, trade and investments between Indonesia and Singapore in their respective local currencies.
This will help businesses and other users reduce their exposure to exchange rate risks and costs.
The LOI follows the signing of a memorandum of understanding (MOU) on a framework for cooperation to promote bilateral transactions in local currencies by both central banks in August 20224 and is in line with Asean’s financial integration efforts to facilitate the wider use of local currencies in intra-Asean transactions.
BI’s Warjiyo said: “Cross-border QR payment linkage between Indonesia and Singapore will promote faster, cheaper, more transparent, and more inclusive cross-border payments, particularly for the benefits of micro, small, and medium enterprises.”
“The linkage serves as follow-up of the commitment among Asean members on regional payment connectivity, and the Indonesian Payment Systems Blueprint 2025. It provides a more convenient and efficient payment method for users,” he added.
Menon noted: “The QRIS-NETS QR payment linkage will promote cross-border e-commerce activities and tourism spending across Singapore and Indonesia, by individuals and small businesses. The upcoming local currency settlement framework by BI and MAS will complement this payment linkage by facilitating the use of Indonesia Rupiah and Singapore Dollar for the settlement of cross-border payments. These initiatives mark another milestone for Singapore’s growing cross-border payments linkages with key regional economies."
