Singapore and Thailand to link national payment systems in 2021
Singapore and Thailand will link their payment systems together sometime mid-next year, in what both countries are calling a world “first”, finews.asia reports.
PayNow, a payment collection application used by Singapore’s banks, will link to Thailand’s PromptPay – a real-time payments platform.
Both national faster payment systems were built by Vocalink, a subsidiary of card issuing giant Mastercard.
How it will work
The idea is that cross-border remittances will, as a result, become cheaper and quicker.
The countries’ regulators, the Monetary Authority of Singapore (MAS) and Bank of Thailand, have been working on the payments link for some three years now.
Ravi Menon, MAS’ managing director, announced the 2021 go-live at the Singapore Fintech Festival.
To begin with, just a small group of banks in both countries will participate in the go-live. But over time, the regulators plan to onboard more banks and non-banking firms.
And the plan isn’t just exclusive to Singapore or Thailand. Menon said in his speech, as reported by finews.asia, that the link could stretch to more central banks in the Asia-Pacific region.
These national payment systems have been transformational in their domestic countries, which makes connecting them to each other a natural next step.
Progress so far
In Thailand, PromptPay is used by 37% of Thai consumers. That’s according to a report by Rapyd, a payments firm which recently launched in Thailand, its seventh global market.
Thailand is the second largest ecommerce market in Southeast Asia, as per JP Morgan data. With cross-border spending making up 50% of the country’s total ecommerce spend.
As of July 2020, PromptPay registrations totalled 55.2 million – a user base largely made up of 21–37-years-olds. That’s according to central bank data.
In Singapore, PayNow monthly transaction values have crossed the $3 billion mark – a four-fold jump from July 2019.
Four out of five individuals and three out of four active businesses in Singapore have now adopted PayNow.
SME solution moves to next stage
As well as focusing on merchant and consumer payment links, Menon also highlighted Singapore’s efforts to improve cross-border payments and settlements for SMEs.
Project Ubin, set up by five years ago by the MAS to explore a blockchain-based multi-currency settlement system, is moving from experimentation towards commercialisation.
Banks DBS and JP Morgan, as well major investment firm Temasek, are heading up the roll-out. Pilot trials will commence next year.
“The goal of cheaper cross-border payments that settle round the clock, and in real-time, is drawing closer,” Menon said. “SMEs would benefit greatly when this becomes a reality.”
Don’t forget about green
To end his speech, Menon highlighted the MAS’ launch of Project Greenprint.
The platform, designed to promote green finance, mobilises capital, monitors commitment and measures impact.
Looking beyond this platform, the regulator has put aside $37 million to support green projects.