The Covid-19 pandemic has upended lives and livelihoods in 2020, but it is also accelerating Asia’s transition to digital financial services. Notwithstanding border restrictions, the region’s digital payments ecosystem is growing as countries collaborate to connect their domestic payment systems.

Singapore and Thailand are set to link their respective national payment systems — PayNow in Singapore and PromptPay in Thailand — by the middle of this year, according to Ravi Menon, managing director at Singapore’s central bank and financial regulator, the Monetary Authority of Singapore (MAS). 

“This linkage between two countries’ national faster payment systems will be the first-of-its-kind in the world,” said Menon at the Singapore FinTech Festival in December 2020.

PayNow or PromptPay users will be able to send money real-time directly from Singapore to Thailand, or vice versa, just by using their mobile phone numbers.

The connectivity will be introduced in phases, starting with a small group of banks from both countries, and subsequently scale up to include more banks and non-bank providers over time.  Many foreign nationals and migrant workers live and work in Singapore. “If we can make cross-border remittances cheaper and faster, our migrant workers can provide better and more timely support for their families,” Menon said.   Apart from affordable cross-border remittances between the two countries, the connectivity will offer a cashless e-payment alternative for tourists and businesses in the Singapore-Thailand trade corridor.

Challenges to cross-border payments connectivity

According to Asbe, MAS and India’s Reserve Bank of India together with the NPIC have been working together to structure a “real-time remittance back to India.”

“We are hoping that we will finalize the scope and will try to go live by [2021], but it is very important for the two regulators to come together because a lot of checks and compliance have been deployed by the respective regulators for their countries,” Asbe said.

Global standards will also facilitate the building of cross-border payments connectivity and interoperability. “I’m sure bodies like the Bank for International Settlements (BIS) and World Bank will play a very big role to define the standards; some minimum requirements to carry out these activities so it becomes like a norm,” Asbe said. “Today in the payment systems, we have a lot of cross-border payments. There is Visa, Mastercard, UnionPay, Amex, Rupay, JCB, along with Discover and Diners. We require some global setting standards organisation to come in and create global standards.”

Source: Forkast news