SINGAPORE - Consumers in Singapore and Malaysia will be able to make real-time cross-border fund transfers using their mobile phones by the end of next year, the two countries' central banks announced on Monday (Sept 27).
Plans to start a phased linkage of Singapore's PayNow and Malaysia's DuitNow real-time payment systems will kick off in the fourth quarter of 2022, the Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) said in a joint statement.
This will allow customers of participating financial institutions to make real-time fund transfers between Singapore and Malaysia using just a mobile number. Customers will also be able to make retail payments by scanning Nets or DuitNow QR codes displayed at merchants' storefronts.
The tie-up is also expected to facilitate payments for travellers from the two countries. Before the pandemic, an average of 12 million people travelled to and from Singapore and Malaysia on a yearly basis, the announcement said.
Mr Sopnendu Mohanty, chief fintech officer at MAS, said: "Singapore's remittance corridor with Malaysia is our largest remittance corridor; hence, the PayNow-DuitNow linkage will be an important infrastructure to support the cross-border payment needs of individuals and businesses as well as the growing digital economic activity between both countries."
The move comes after MAS and the Reserve Bank of India on Sept 14 announced similar plans to link PayNow with India's Unified Payments Interface (UPI) real-time payment system in July 2022.
In a world first for instant cross-border payments, MAS and the Bank of Thailand in April announced the linking of PayNow and Thailand's PromptPay, allowing customers of participating banks to instantly transfer funds of up to $1,000, or 25,000 baht (S$1,019), daily across the two countries with their mobile phones.
The PayNow-DuitNow partnership is expected to facilitate and accelerate cross-border remittances between Singapore and Malaysia. In 2020, funds totalling $1.3 billion was transferred across the two countries, according to the announcement.
Following the launch, MAS and BNM will progressively expand the PayNow-DuitNow linkage to incorporate a wider range of features and participants, the announcement said.
"By bringing the efficiencies observed in domestic payments to cross-border payments, the PayNow-DuitNow linkage will be a game-changer, resulting in faster, cheaper and more accessible payment services for the people of both countries," BNM assistant governor Fraziali Ismail said.
He added that the partnership will strengthen economic ties and support post-pandemic growth in the economy.
The move aligns with the Group of 20's (G-20) work of driving faster, cheaper, and more inclusive and transparent cross-border payments. It is also a concrete step towards achieving an Asean network of linked real-time payment systems.