As the digital economy continues its rapid growth and seeing how eCommerce and fintech sectors are also experiencing similar explosive expansion for user engagements, the next logical step is to make cross-border transactions a reality. In essence, the financial system must step up in its role to remove existing borders for any transaction.
After Malaysia’s Maybank announced how it added China onto its growing list of countries that can perform cross-border transactions via the Maybank MAE app, the respective national banking authorities of Malaysia and Singapore have jointly revealed how real-time payment is now available via direct linkage between Malaysia’s DuitNow and Singapore’s PayNow platforms.
This arrangement, which launched at the just concluded Singapore Fintech Festival, took nearly a year to compete. Notably, it took so much time to achieve this milestone so as to ensure both nations can further reinforce the already established QR payment linkage between their respective financial systems. — Bank Negara Malaysia (BNM) and Monetary Authority of Singapore (MAS).
With real-time transactions now being made official between both countries, Malaysians and Singaporeans can send and receive funds of up to RM3,000 (~SGD/~US$) or SGD1,000 (~MYR/~US$) without the original hassles.
Banks that can use this newly established real-time Malaysia-Singapore transaction include Maybank, CIMB Group, and Touch’N’Go Digital for Malaysia’s side and Singapore’s Liquid Group, Maybank Singapore, OCBC, and UOB. According to the press releases from BNM and MAS, while these banking and financial institutions are confirmed, they will be rolling out in a phased approach and scale accordingly based on how the banks “will progressively increase the number of eligible user groups from today until end-January 2024.”
For both national banking institutions, it is very much the end-goal of piecing together an extensive collaboration between themselves and connected ecosystem players. This — primarily — includes payment system operators, scheme platform owners, and connected financial institution services that operate in both Malaysia and Singapore.
“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. The DuitNow-PayNow 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,” said Abdul Rasheed Ghaffour, Bank Governor, BNM.
Beyond optimising cross-border financial transactions for Malaysians and Singaporeans, the new arrangement also introduced new layers of user access and transparency. More critical is how users can transfer funds instantly between the two countries via the receipient’s mobile phone number or, in the case of Singapore, through a dedicated Virtual Payment Address.
All these milestones are aligned with the ASEAN Payment Connectivity Initiative and G20 Roadmap for Enhancing Cross-Border Payments.
“The PayNow-DuitNow linkage is the culmination of a shared aspiration by Singapore and Malaysia to facilitate cross-border payments between our two countries. This linkage represents another step toward ASEAN’s vision for regional payments interconnectivity.” added Ravi Menon, Managing Director, MAS.
Banks that are already on the DuitNow and PayNow networks will eventually access this new arrangement and add on their own exclusive functions.