The Bank of Thailand (BoT) and the Monetary Authority of Singapore (MAS) have embarked on a digital payment linkage between the two countries via the PromptPay and PayNow systems.
The Thai central bank and the central bank and financial regulatory authority of Singapore on Thursday unveiled the linkage of Thailand's PromptPay and Singapore's PayNow real-time retail payment systems. The linkage, which is the first of its kind in the world, is the culmination of several years of extensive collaboration between BoT and MAS and payment system operators, bankers' associations, and participating banks in both countries.
The central bank said in a statement that customers of participating banks in Thailand and Singapore will be able to transfer funds of up to S$1,000 or 25,000 baht daily using just a mobile number. There will be no need to populate information fields such as the recipient's full name and bank account details as is the case with normal remittance solutions.
The funds will flow seamlessly and securely between customers' accounts in Thailand and Singapore. The experience will be similar to existing domestic fund transfers via PromptPay and PayNow in which senders can use their mobile banking or payment applications to initiate fund transfers instantly and securely, at any time of the day.
The transfers will be completed within a matter of minutes, representing an improvement of the average of 1-2 working days needed by most cross-border remittance solutions.
The participating banks have committed to set their fees against the market rate. The fees will be affordable and transparently displayed to senders prior to confirming transfers. Senders will also be able to view foreign exchange charges prior to sending funds and these rates will be benchmarked closely to market rates, according to BoT's statement.
The PromptPay-PayNow linkage is a key collaboration under the Asean Payment Connectivity scheme that was initiated in 2019 and closely aligns with efforts by the G20, Financial Stability Board, and other international standard-setting bodies to facilitate faster, cheaper, more inclusive and more transparent cross-border payment arrangements.
BoT and MAS will progressively scale the PromptPay-PayNow linkage to include more participants and extend transfer limits to facilitate business transactions.
Ravi Menon, managing director of MAS, said the PromptPay-PayNow linkage is a pioneering effort. It shows that the existing payment infrastructure and the banking system have the potential to provide seamless cross-border payment options to retail customers.
The PromptPay-PayNow linkage is only the beginning. MAS' shared objective with BoT is to work with their Asean counterparts to expand the bilateral linkage into a network of linked retail payment systems across the region, he said.
Sethaput Suthiwartnarueput, the BoT's governor said after the success of domestic digital payments via PromptPay, the regional central banks have sought to enhance cross-border linkages with Asean and other countries.
Moreover, local banks have also launched cross-border QR payment connectivity with Japan, Laos, Cambodia and Vietnam.