MAS establishes several cross-border connectivity deals

The Monetary Authority of Singapore (MAS) has inked two cross-border connectivity deals with Bank Negara Malaysia (BNM) and Bank Indonesia (BI).

Singapore’s PayNow and Malaysia’s DuitNow will enjoy a real-time payment systems linkage, enabling instant, secure and cost-effective peer-to-peer transfers between the two countries in the first deal to have the participation of non-bank financial institutions.

Customers of Singapore’s Liquid Group, Maybank Singapore, OCBC and UOB and Malaysia’s CIMB Bank Malaysia Berhad, Malayan Banking Berhad and TNG Digital Sdn. Bhd. can send and receive funds of up to SGD$1,000 or MYR 3,000 every day by using mobile numbers or VPAs.

The number of eligible users will progressively increase until the end of January 2024, with further financial institutions to be onboarded in due course.

“The PayNow-DuitNow linkage is the culmination of a shared aspiration by Singapore and Malaysia to facilitate cross-border payments between the two countries,” Outgoing MAS Managing Director, Ravi Menon, said.

“This linkage represents another step towards ASEAN’s vision for regional payments interconnectivity.”

The PayNow-DuitNow connection follows large collaborative efforts among central banks, payment services providers and participating financial institutions of both countries. It is set to improve the cost, speed, access and transparency of cross-border payments and grow the countries’ financial inclusivity and accessibility.

The deal also supports the objectives of the ASEAN Payment Connectivity Initiative and the G20 Roadmap for Enhancing Cross-border Payments.

“Cross-border payments that are fast, secure and cost-efficient can provide immense benefits especially for individuals and small businesses in countries with very close economic ties such as Malaysia and Singapore,” BNM Governor, Datuk Abdul Rasheed Ghaffour, said.

“The PayNow-DuitNow linkage enables us to reap these benefits towards our shared growth and prosperity, while laying the foundations for scalable cross-border payment networks across and beyond ASEAN.”

The Quick Response Code Indonesian Standard (QRIS)-NETS QR linkage allows customers of participating financial institutions to make cross-border retail payments using QR codes on existing mobile banking apps, including Singapore’s OCBC and UOB and Indonesia’s PT Bank Central Asia Tbk, PT Bank CIMB Niaga Tbk, PT Bank Pembangunan Daerah Bali, PT Bank Permata Tbk, PT Bank Syariah Indonesia Tbk, PT Bank Mega Tbk, PT Bank Sinarmas Tbk, PT Bank Rakyat Indonesia Tbk, PT Espay Debit Indonesia Koea and PT Netzme Kreasi Indonesia.

The deal is set to grow the connection between digital economy and financial ecosystems, as well as benefit micro and small businesses to access a new broad customer base.

“Cross-border QR payment linkage between Indonesia and Singapore will promote faster, cheaper, more transparent, and more inclusive cross-border payments, particularly for the benefits of micro, small, and medium enterprises,”Perry Warjiyo, Governor of Bank Indonesia, said.

“The linkage serves as follow-up of the commitment among ASEAN members on Regional Payment Connectivity, and the Indonesian Payment Systems Blueprint 2025. It provides a more convenient and efficient payment method for users.

“In our ongoing commitment, we are also excited to announce our strategic initiative to promote a wider use of local currencies in bilateral transactions through the LCT framework, which is expected to be implemented in 2024. After LCT Framework implementation, the cross-border QR payment linkage initiative will use direct quotations of local currency exchange rates provided by the Appointed Cross Currency Dealer (ACCD) banks.”