Last week, The Monetary Authority of Singapore announced of government plans of pursuing a phased linkage of its PayNow payment systems with Malaysia’s DuitNow.
Once the first phase of linkage achieves completion the linked payment systems between the two countries will enable participating financial institutions to offer customers, real-time fund transfer services between Singapore and Malaysia using their mobile number. Moreover, the linkage will also let customers make retail purchases and pay for them using the DuitNow or NRTS QR codes displayed by participating stores.
In July of this year, Singapore’s Bank for International Settlements and the Monetary Authority of Singapore revealed the plan as well issued a set of guidelines specifically pertaining to multilateral linking of domestic real-time payment systems beyond and across borders.
The Singapore-Malaysia Payment Systems Linkage is Actually Part of a Greater Plan
The greater significance of linking the two payment systems is the enhancement of seamless fund transfers of large amounts of remittances between the two countries, which even reached $1.3 billion last year. The linkage comes just after the successful completion of a similar project involving The Reserve Bank of India’s Unified Payment Interface. Fund transfers between customers in Singapore and India are now more affordable since the reciprocity eliminates the need to process transactions using a third party payment system.
The project has been named Project Nexus, as it envisions the creation of “Nexus Gateways.” The goal is to synchronize all compliance, message translations, sequencing of payments, and foreign exchange conversion of all participating financial institutions. The project also includes the tie-up between Thailand’s PromptPay and Singapore’s PayNow that was launched last April 2021.