The Monetary Authority of Singapore (MAS) and the Bank of Thailand (BOT) have announced that they will integrate their individual countries real-time payments rails to facilitate faster cross-border transfers.
The integration of Singapore’s PayNow and Thailand’s PromptPay is the first instance of cross-border payments infrastructure being linked globally, tackling key pain points such as high fees and long transaction times as with typical international remittances.
At the initial phase, customers of participating banks in Singapore and Thailand will be able to transfer funds up to S$1,000 (or 25,000 baht) daily within a matter of minutes, using just their mobile phone numbers, said a MAS and BOT statement.
The participating banks are DBS, OCBC and UOB, as well as four banks in Thailand (Bangkok Bank, Kasikorn Bank, Krung Thai Bank and Siam Commercial). MAS and BOT will progressively scale the network to include more participants and extend the transfer limits to facilitate real-time payments business transactions.
The new PayNow-PromptPay integration aims to halve remittance costs. Currently, an estimated 6.5% of remittances goes to fees and charges. MAS and BOT said the participating banks have committed to benchmark their fees against the market.
“The fees will be affordably priced and transparently displayed to senders prior to confirming their transfers,” said the regulators.
“Senders will also be able to view the applicable foreign exchange charges prior to sending their funds, with these rates benchmarked closely to prevailing market rates.”
The transfers will also be completed under five minutes – an improvement from the average of one to two working days needed by most cross-border remittance solutions.
MAS and BOT said the experience will be similar to how domestic PayNow and PromptPay transfers are made today, in which senders can use their mobile banking or payment applications to initiate fund transfers instantly and securely.
The PayNow-PromptPay integratio is a key collaboration under the Asean Payment Connectivity initiated in 2019, and closely aligns with efforts by the G-20 (Group of Twenty), Financial Stability Board, and other international standard-setting bodies to facilitate “faster, cheaper, more inclusive and more transparent” cross-border payment arrangements, said MAS and BOT.