The Central Bank of Thailand and the Monetary Authority of Singapore (MAS) have unveiled the linkage of Thailand's PromptPay and Singapore's PayNow in real-time retail payment systems.
The linkage, which is the first of its kind in the world, is the high point of several years of extensive collaboration between the Bank of Thailand (BoT) and MAS, the payment system operators, bankers' associations, and participating banks in Thailand and Singapore.
The partnership was announced just a day after DBS, JP Morgan and Temasek declared their plans to develop an open industry blockchain platform to accelerate cross-border payments, trade transactions, and foreign exchange settlement through a new technology company called Patriot.
Three out of 12 PayNow banks in Singapore are participating in this initiative; DBS Bank, OCBC Bank, and UOB Bank. They have linked together with Thailand’s Bangkok, Kasikorn, Krungthai, and Siam Commercial Banks.
The MAS and BOT will progressively add more participating banks and extend the transfer limits to facilitate business transactions.
The linkage allows customers of participating banks in Thailand and Singapore to transfer funds of up to THB25,000 or SGD1,000 ($743) daily across the two countries, using a mobile number and there is no need to give the recipient’s full name and bank account details.
This new cross-border payment experience will be similar to how domestic PayNow and PromptPay transfers are made, where senders can use their mobile banking or payment applications to initiate fund transfers instantly and safely, at any time of the day.
Funds can flow between users’ bank accounts in minutes
The funds will be transferred seamlessly between customers’ accounts and will be completed in less than five minutes. Most of the payment solutions take one to two working days to process a cross-border transaction.
The participating banks have committed to benchmark their fees against the market. The fees will be affordably priced and transparently displayed to senders before confirming their transfers. Senders can view foreign exchange charges before sending funds and these rates will be benchmarked closely to market rates, according to BoT's statement.
This linkage is a key collaboration under the Asean Payment Connectivity initiative that was launched in 2019.
Ravi Menon, director at MAS said the PayNow-PromptPay linkage is only the beginning of a more ambitious project. "MAS' shared objective with BOT is to work with our ASEAN counterparts to expand this bilateral linkage into a network of linked retail payment systems across ASEAN".
Sethaput Suthiwartnarueput, BOT governor said Thailand also seeks to enhance cross-border linkages with ASEAN and other countries, and it has launched its quick response (QR) cross-border payment connectivity initiative with Japan, Laos, Cambodia, and Vietnam.
Wee Ee Cheong, chairman of the Association of Banks in Singapore (ABS) and CEO at UOB said, "This initiative is also an important step to connect payment systems across Southeast Asia at scale in the future, enabling more bank customers to send money to their friends and families and pay for goods and services fast, simple and safe across borders".
Lawrence Chan, chairman of Banking Computer Services and group CEO at NETS said, "As the operator of PayNow and Fast, we are extremely proud to be part of this trailblazing effort".
This new initiative aims to halve remittance fees and be more upfront about the pricing. The MAS expects to have similar partnerships with other Southeast Asian countries in the months ahead. Various local banks have also launched cross-border QR payment connectivity with Japan, Laos, Cambodia, and Vietnam.