The Monetary Authority of Singapore (MAS), the nation’s reserve bank and financial regulator, and Bank Negara Malaysia (BNM). the central bank of the Southeast Asian country, revealed that they are beginning a phased linkage of Singapore’s PayNow and Malaysia’s DuitNow real-time payment solutions.
The initial phase of the PayNow-DuitNow linkage will reportedly be introduced during Q4 2022. This should allow clients of participating financial platforms to carry out real-time money transfers between Singapore and Malaysia using only a mobile number.
Clients can conduct retail payments by simply scanning NETS or DuitNow QR codes that are displayed at merchants’ storefronts. The initiative will aim to support easy payments for the relatively high volume of remittance payments carried out between Singapore and Malaysia, which reportedly reached SGD 1.3 billion last year. It will also be catering to consumers who are traveling between both nations, which saw considerable pre-COVID traffic of around 12 million arrivals on average (per year).
After the successful launch, MAS and BNM aim to further expand the PayNow-DuitNow linkage to incorporate an extensive range of new features and participants. Both regulatory agencies will also be looking into the feasibility of integrating different features like distributed ledger technology (DLT)-enabled services to increase efficiencies in payments clearing and settlement between participating banking institutions.
The PayNow-DuitNow linkage represents a key milestone in the history of strong ties between Singapore and Malaysia. The linkage aims to align with the G20’s work of promoting quicker, affordable, more (financially) inclusive, and transparent international payments, and is a solid step towards establishing an ASEAN network of linked real-time transaction platforms.
This announcement has been made after a similar arrangement was recently made between Malaysia and Thailand.
Fraziali Ismail, Assistant Governor of BNM, stated:
“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. Not only would this initiative further strengthen the economic ties between Singapore and Malaysia, it would also serve as a key enabler to support post-pandemic economic growth.”
Sopnendu Mohanty, Chief Fintech Officer at MAS, remarked:
“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. The linkage also offers MAS and BNM a valuable opportunity to incorporate the use of distributed ledger and smart contract technologies in the wholesale cross border payments space.”
