Singapore and Malaysia to Link Real-Time Payment Systems
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The link will enable more seamless payments for the high volume of remittances between the two neighbors, which reached S$1.3 billion ($960 million) in 2020.
Singapore and Malaysia’s central banks will be embarking on a phased linkage of PayNow and DuitNow, their national real-time payment systems, the Monetary Authority of Singapore (MAS) said in an announcement.
In the first phase, to be launched in the fourth quarter of 2022, customers of participating financial institutions will be able to make real-time transfers using a mobile phone number and make retail payments by scanning a PayNow/DuitNow QR code.
The linkage will subsequently incorporate a wider range of features and participants. Both regulators will also explore the feasibility of integrating innovative features such as distributed ledger technology-based solutions to catalyse greater efficiencies in payments clearing and settlement between participating banks, the announcement said.
Singapore’s remittance corridor with Malaysia is the city-state’s largest remittance corridor. The two countries also saw 12 million travelers crossing the border pre-pandemic.
The PayNow-DuitNow linkage will be an important infrastructure to support cross-border payment needs of individuals and businesses, as well as the growing digital economic activity between both countries, Sponendu Mohanty, MAS chief fintech officer, said.
The linkage also allows MAS and counterpart Bank Negara Malaysia (BNM) to incorporate the use of distributed ledger and smart contract technologies in the wholesale cross-border payments space, he added.
Earlier this month, MAS also announced that it is working to connect PayNow to India’s Unified Payments Interface (UPI) by mid-2022.
Singapore and Thailand have also connected their payments infrastructures to enable cross-border peer-to-peer transactions.
Questions & Answers
Q.What is the primary objective of linking Singapore and Malaysia's real-time payment systems?
What is the primary objective of linking Singapore and Malaysia's real-time payment systems?
The main goal is to enable more smooth payments for the high volume of remittances between the two countries. It will support cross-border payment needs for individuals and businesses, and growing digital economic activity.
Q.Which financial institutions will participate in the first phase of the linkage, and what features will be available?
Which financial institutions will participate in the first phase of the linkage, and what features will be available?
Customers of participating financial institutions will be able to make real-time transfers using a mobile phone number. They can also make retail payments by scanning a PayNow/DuitNow QR code, starting in Q4 2022.
Q.What advanced technologies are the regulators considering for future integration?
What advanced technologies are the regulators considering for future integration?
Both regulators will explore integrating innovative features such as distributed ledger technology-based solutions. This aims to catalyse greater efficiencies in payments clearing and settlement between participating banks, and use smart contract technologies.
Q.How significant is the remittance corridor between Singapore and Malaysia compared to Singapore's other corridors?
How significant is the remittance corridor between Singapore and Malaysia compared to Singapore's other corridors?
Singapore’s remittance corridor with Malaysia is the city-state’s largest remittance corridor. It accounted for S$1.3 billion ($960 million) in remittances in 2020, highlighting its importance.