Singapore and Malaysia to link their real-time payments system for cross-border payments
While private companies are fighting to dominate digital payments, on the other side, central banks around the globe have taken the initiative to formalise cross-border payments infrastructure. This is either through a traditional API process or a new CBDC route.
This week, The Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) announced plans to start a phase of linking Singapore’s PayNow and Malaysia’s DuitNow real-time payment systems.
The press note stated that the first phase of PayNow-DuitNow linkage will be launched in the fourth quarter of 2022 allowing clients of participating financial institutions to make real-time traders between the respective countries using a cell phone number.
“Singapore’s remittance corridor with Malaysia is our largest remittance corridor; hence, the PayNow-DuitNow linkage will be an important infrastructure to support cross-border payment needs of individuals and businesses, as well as the growing digital economic activity between both countries”, said Sopnendu Mohanty, Chief FinTech Officer of MAS.
Under this, the project will enable seamless payments for the high volume of remittances between Singapore and Malaysia, which reached SGD 1.3 billion in 2020, the release stated.
It also noted that ‘MAS and BNM will progressively expand the PayNow-DuitNow linkage to incorporate a wider range of features and participants’ and will include and explore the feasibility of integrating features such as distributed ledger technology-based solutions for greater efficiencies in payments clearing and settlement between participating banks.