Ant International, Grab, and StraitsX Explore PBM for Cross-Border Payments

Ant International, Grab, and StraitsX have announced a collaborative effort to explore the potential application of Purpose Bound Money (PBM) in cross-border payments.

PBM is a protocol that specifies the conditions upon which an underlying digital currency can be used and first introduced by MAS as part of Project Orchid, which has the potential to lower the cost of payment processing and the capability for money to be directed toward a specific purpose.

This collaboration aims to enable GrabPay merchants to easily integrate with Ant International’s Alipay+ solutions, accepting payments from a large tourist base. If successful, this advancement in cross-border payment capabilities will expand PBM use cases with the aim of launching in Singapore in 2024.

“With Singapore attracting millions of international visitors yearly, this advancement in cross border payments is poised to open up a wider customer base for local merchants, benefitting small and micro merchants in particular,” according to the announcement.

Generally, smaller merchants in Singapore have only been able to provide a more limited range of payment methods to international travelers.

This constraint is often driven by both the lengthy process and the substantial cost involved in integrating new digital payment methods, which may extend over several months or even years.

By leveraging PBM and a distributed ledger infrastructure, small to micro-merchants can more easily serve overseas customers without the need for new system upgrades nor manual end-of-day reconciliation between accounting systems, thus reducing the hassle of cross-border payments integration.

For local and cross-border consumers, the functionalities and interactions of PBM with existing foreign and domestic payment infrastructures also mean that payment experiences remain largely familiar and seamless, without a need for new applications or consumer wallets to be downloaded when making payments.

As part of the collaboration, GrabPay merchants will be able to accept payments made via the Alipay+ solution, which includes 1.5 billion consumer accounts.

This is made possible through the use of blockchain technology to power back-end payment acceptance flows with PBM, backed by an underlying store of value in the form of XSGD, a Singapore dollar-backed stablecoin issued by StraitsX.

The use of PBM can also potentially lower payment processing costs for GrabPay and Alipay+ powered e-wallets.

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