SINGAPORE - The local PayNow system that lets individuals transfer money using just a mobile number is now linked to Thailand's PromptPay version, the Monetary Authority of Singapore (MAS) and Bank of Thailand (BOT) said in a joint statement on Thursday (April 29).
The linkage between the two countries' national fast payment systems is the first of its kind in the world, they said.
Three of Singapore’s 12 PayNow banks are participating in the scheme - DBS Bank, OCBC Bank and UOB - together with four banks in Thailand - Bangkok Bank, Kasikorn Bank, Krung Thai Bank and Siam Commercial Bank.
MAS and BOT will progressively add more participating banks and extend the transfer limits to facilitate business transactions.
The PayNow-PromptPay linkage will allow customers of the participating banks to transfer funds of up to $1,000 or 25,000 baht (S$1,060) daily across the two countries, with their mobile phones.
There will be no need to populate information fields such as the recipient's full name and bank account details, as with normal remittance solutions.
The experience will be similar to how domestic PayNow and PromptPay transfers are made, in which 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 and securely between customers' accounts in Singapore and Thailand, and the transfers will be completed in less than five minutes, presenting a marked improvement over the average of one to two working days needed by most cross-border remittance solutions.
The fees will be affordably priced at less than 3 per cent to 5 per cent of the value of transfer, compared with the global average of 11 per cent, and will be transparently displayed to senders.
Senders will also be able to view the applicable foreign exchange charges prior to sending their funds, with these rates benchmarked closely to prevailing market rates.
The linkage is a key collaboration under the Asean Payment Connectivity initiative that was launched in 2019, and closely aligns with efforts by the Group of 20 (G-20), Financial Stability Board and other international standard-setting bodies to facilitate faster, cheaper, more inclusive and more transparent cross-border payment arrangements.
Mr Ravi Menon, managing director of MAS, said that 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," he said in the statement.
Dr Sethaput Suthiwartnarueput, governor of BOT, said Thailand also seeks to enhance cross-border linkages with Asean and other countries and has launched its QR cross-border payment connectivity with Japan, Lao PDR, Cambodia and Vietnam.
"This service by the MAS and the BOT will effectively address customers' longstanding pain points in the area of cross-border transfers and remittances including long transaction times and high costs."
Mr Wee Ee Cheong, chairman of ABS and the chief executive of UOB, said in a separate statement: “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 to connect communities, essentially a world first to enable banks’ retail customers to perform cross-border fund transfers.”