Transferring money between Singapore and Thailand has become faster and easier from yesterday, thanks to a ground-breaking partnership between the PayNow system here and Thailand's similar PromptPay.
The initiative marks the first time the local peer-to-peer (P2P) payment systems of two countries anywhere in the world have been linked.
Three of Singapore's 12 PayNow banks are participating in the scheme - DBS Bank, OCBC Bank and UOB - together with Thailand's Bangkok, Kasikorn, Krung Thai and Siam Commercial banks, noted the Association of Banks in Singapore (ABS).
The Monetary Authority of Singapore (MAS) and Bank of Thailand (BOT) said they will progressively add more participating banks and extend the transfer limits to facilitate business transactions.
P2P transactions - also known as person-to-person payments - are money transfers that can be done on mobile devices through a linked bank account or credit card.
Customers of the participating banks will be able to transfer funds of up to $1,000 or 25,000 baht (S$1,060) daily.
There is no need to give the recipient's full name and bank account details, as is required by other remittance solutions.
The experience will be similar to how domestic PayNow and PromptPay transfers are made, where senders can use their mobile banking or payment applications to initiate fund transfers instantly and securely, at any time of the day.
The funds will flow seamlessly between customers' accounts, with the cross-border transfers completed in less than five minutes.
Most cross-border remittance solutions take an average of one to two working days for funds to show up in the recipient's account.
The fees will be affordable and senders will be able to view the foreign exchange rates, the two central banks said in a joint statement.
Ms Yuen Su Wen, 34, a communications executive at a local company, used the OCBC Pay Anyone app to make a transfer to a friend in Thailand yesterday.
"It was just like making a local PayNow transaction. The only difference was having to indicate the amount of Thai baht I wanted my friend to receive," she said.
"I simply logged in to the app, selected my Thai friend's mobile number from my contact list, indicated 'Thai account via PromptPay', keyed in the amount in Thai baht and it was done."
The linkage is a key collaboration under the Asean Payment Connectivity initiative launched in 2019.
It is also aligned with efforts by global standard-setting bodies - such as the Group of 20 and Financial Stability Board - seeking faster, cheaper, inclusive and transparent cross-border payment systems.
The move comes a day after DBS, JP Morgan and Temasek announced plans to develop an open industry blockchain platform to accelerate cross-border payments, trade transactions and foreign exchange settlement through a new technology company called Partior.
Partior is the commercialised outcome of the MAS-led Project Ubin, a public-private partnership on blockchain and central bank digital currency (CBDC) experimentation.
Partior's blockchain platform and the PayNow-PromptPay linkage are seen as the building blocks of multilateral digital payments infrastructure sought by Singapore to make settlement of global payments less costly, instantaneous and without the delays caused by multiple validations.
The Singapore centre of the BIS Innovation Hub, a Bank for International Settlements initiative backed by the MAS, is experimenting on platforms for multilateral connectivity through the Foundational Digital Infrastructures Project based on traditional technologies, and Project Dunbar, a multilateral multi-CBDC wholesale settlement platform.
MAS managing director Ravi Menon said the PayNow-PromptPay linkage is only the beginning of a more ambitious project. "MAS' shared objective with BOT is to work with our Asean counterparts to expand this bilateral linkage into a network of linked retail payment systems across Asean."
BOT governor Sethaput Suthiwartnarueput added that Thailand also seeks to enhance cross-border linkages with Asean and other countries, and has launched its QR cross-border payment connectivity initiative with Japan, Laos, Cambodia and Vietnam.
Mr Wee Ee Cheong, chairman of ABS and chief executive officer of UOB, said: "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."
Mr Lawrence Chan, the chairman of Banking Computer Services and Nets' group CEO, said: "As the operator of PayNow and Fast, we are extremely proud to be part of this trailblazing effort."
