The Association of Banks in Singapore (ABS) has announced that the linkage between Singapore’ PayNow and Thailand’s PromptPay has been established.
The linkage means retail customers from participating banks in both countries can now securely perform cross-border fund transfers using their mobile numbers.
The linkage between the countries’ national faster payment systems is the first of its kind around the world.
The project began discussions in 2018 from an agreement made between the Monetary Authority of Singapore (MAS) and Bank of Thailand (BOT) to work on the linkage between PayNow and PromptPay.
Beyond the operational and governance considerations of both schemes, the project’s cross-border nature also requires robust anti-money laundering and sanction screening risk mitigations to be put in place.
Both platforms also needed to be aligned on the target operating model, business rules, technical connectivity as well as legal framework.
SEE:Non-bank financial institutions to get access to FAST and PayNow
The linkage is currently established with Singapore’s DBS Bank, OCBC and UOB, as well as Thailand’s Bangkok Bank, Kasikorn Bank, Krung Thai Bank and Siam Commercial Bank. It will cater for small value peer-to-peer transactions that’re less than $1,000 or THB25,000.
Over time, the project will explore including more participating banks and use cases.
PayNow was launched in 2017 as a convenient way to make interbank transfers within Singapore. With the linkage, customers in Singapore are now able to make payments at near real-time speed to Thailand and vice versa.
Fees for the linkage are comparable to remittance services.
Wee Ee Cheong, ABS Chairman, Deputy Chairman and CEO of UOB, says: “We welcome the industry initiative to link PromptPay with PayNow as this will make cross-border funds transfers between Singapore and Thailand customers simpler and smarter”.
“This initiative is also an important step to connecting payment systems across Asean at scale in the future, enabling more bank customers to send money to their friends and families and to pay for goods and services quickly, simply and safely across borders,” he adds.
“For the first time ever, this innovative payment systems linkage will extend peer-to-peer payment frontiers beyond Singapore to Thailand. As the operator of PayNow and FAST, we are extremely proud to be part of this trailblazing effort to connect communities, essentially a world first to enable banks’ retail customers to perform cross-border fund transfers using mobile numbers,” says Lawrence Chan, Chairman of Banking Computer Services Pte Ltd (BCS) and NETS’ Group CEO.
"The tie-up between PayNow and Promptpay is significant because it serves as a blueprint for how central banks can embrace the opportunity to cooperate and achieve an open network that can enable all types of payment stakeholders to move money instantaneously with improved traceability," says Kanv Pandit, group managing director, Asia Pacific, banking solutions at FIS.
"Cross border payments involve bridging the closed loops of multiple currency and domestic payment systems and the complexities presented by the different regulatory jurisdictions. All parties would need to commit to cooperating to solve the key pain points. At the moment, non-real-time cross border payments take a day or more to reach their destination. At initiation, the exchange rate can be unknown and transaction fees vary. Payments may be routed through many banks before reaching the destination, causing further delays and fees," he adds.
"It has never been more important to remove the barriers to trade by building open, sustainable and instant payment services across the globe. It would be exciting to see how MAS continues to move in this direction with other markets that are primed and ready for a total refresh in cross-border payments."
