February 26, 2024

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Collaboration Between Singapore and Malaysia to Link National Payment Systems

The digital economy extensively refers to the creation and consumption of digital products and services, as well as digital platforms and business activities enabled by digital technologies. This can range from simple tasks like sending emails to more complex ones like big data analytics. The digital economy has captured the attention of policymakers around the world in recent years, which is not surprising given that the adoption of digital technologies has the potential to empower individuals, transform industries, and boost economies’ competitiveness.

In addressing the digital economy in the country, Singapore will next link its national real-time payment system to Malaysia’s equivalent E-payment infrastructure, just weeks after announcing similar plans with India. The most recent collaboration will allow residents of the two neighbouring countries to transfer funds using their mobile phone numbers.

Singapore’s remittance corridor with Malaysia is our largest remittance corridor; hence, both payment systems linkage will be an important infrastructure to support cross-border payment needs of individuals and businesses, as well as the growing digital economic activity between both countries.

– MAS’ chief fintech officer

The Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) announced in a joint statement that efforts to link their payment systems would be phased, with the first phase beginning in the fourth quarter of 2022. Consumers in both countries would be able to pay for their purchases by scanning Singapore’s Network for Electronic Transfers or Malaysia’s E-payment QR codes displayed at merchants’ stores, in addition to transferring funds using a mobile number.

The integration, as per the two central banks, will allow for more seamless payments between the two countries, where remittances totalled SG$1.3 billion ($959.85 million) last year. There was also a lot of traffic between the two neighbouring countries, which had 12 million arrivals a year before the pandemic.

Following the initial launch, MAS and BNM intend to expand the connectivity to include additional features and partnerships. Both central banks intend to investigate the possibility of introducing features such as blockchain-based services to improve efficiencies in payments clearing and settlement between participating banks.

Moreover, it has also mentioned that connecting the two payment systems was consistent with the G20’s efforts to promote “faster, cheaper, more inclusive, and transparent” cross-border payments. It would also move ASEAN closer to its goal of establishing a network of linked real-time payment systems.

MAS’ chief fintech officer said, “the linkage will also offer MAS and BNM a valuable opportunity to incorporate the use of distributed ledger and smart contract technologies in the wholesale cross-border payments space.”

Whereas, BNM’s assistant governor added: “By bringing the efficiencies observed in domestic payments to cross-border payments, the linkage will be a game-changer resulting in faster, cheaper, and more accessible payment services for the people of both countries. Not only would this initiative further strengthen the economic ties between Singapore and Malaysia, but it would also serve as a key enabler to support post-pandemic economic growth.”

OpenGov Asia in an article reported that the central banks of India and Singapore also plan to link their digital payments systems to enable instant, low-cost fund transfers. The two sides will connect India’s Unified Payments Interface (UPI) and Singapore’s payment system in a major push to disrupt the cross-border transactions between the two nations that amount to over US$1 billion each year.

The move is targeted for operationalisation by July 2022, both nation’s central banks said earlier this week. Users on either of the systems will be able to make transactions with one another without having to sign up to the second platform. When implemented, fund transfers can be made from India to Singapore using mobile phone numbers, and from Singapore to India using UPI virtual payment addresses (VPA). The experience of making a transfer to a UPI VPA will be similar to that of a domestic transfer to a payment system VPA, noted the Monetary Authority of Singapore in a press statement.

According to a report, Singapore’s new digital economy will generate nearly $700.80 million (USD 500 million) in transactions due to the pandemic’s shift in consumer demand to online. Online transaction volumes and revenues for some businesses increased by up to three times their normal rate.

PARTNER

Qlik’s vision is a data-literate world, where everyone can use data and analytics to improve decision-making and solve their most challenging problems. A private company, Qlik offers real-time data integration and analytics solutions, powered by Qlik Cloud, to close the gaps between data, insights and action. By transforming data into Active Intelligence, businesses can drive better decisions, improve revenue and profitability, and optimize customer relationships. Qlik serves more than 38,000 active customers in over 100 countries.

PARTNER

CTC Global Singapore, a premier end-to-end IT solutions provider, is a fully owned subsidiary of ITOCHU Techno-Solutions Corporation (CTC) and ITOCHU Corporation.

Since 1972, CTC has established itself as one of the country’s top IT solutions providers. With 50 years of experience, headed by an experienced management team and staffed by over 200 qualified IT professionals, we support organizations with integrated IT solutions expertise in Autonomous IT, Cyber Security, Digital Transformation, Enterprise Cloud Infrastructure, Workplace Modernization and Professional Services.

Well-known for our strengths in system integration and consultation, CTC Global proves to be the preferred IT outsourcing destination for organizations all over Singapore today.

PARTNER

Planview has one mission: to build the future of connected work. Our solutions enable organizations to connect the business from ideas to impact, empowering companies to accelerate the achievement of what matters most. Planview’s full spectrum of Portfolio Management and Work Management solutions creates an organizational focus on the strategic outcomes that matter and empowers teams to deliver their best work, no matter how they work. The comprehensive Planview platform and enterprise success model enables customers to deliver innovative, competitive products, services, and customer experiences. Headquartered in Austin, Texas, with locations around the world, Planview has more than 1,300 employees supporting 4,500 customers and 2.6 million users worldwide. For more information, visit www.planview.com.

SUPPORTING ORGANISATION

SIRIM is a premier industrial research and technology organisation in Malaysia, wholly-owned by the Minister​ of Finance Incorporated. With over forty years of experience and expertise, SIRIM is mandated as the machinery for research and technology development, and the national champion of quality. SIRIM has always played a major role in the development of the country’s private sector. By tapping into our expertise and knowledge base, we focus on developing new technologies and improvements in the manufacturing, technology and services sectors. We nurture Small Medium Enterprises (SME) growth with solutions for technology penetration and upgrading, making it an ideal technology partner for SMEs.

PARTNER

HashiCorp provides infrastructure automation software for multi-cloud environments, enabling enterprises to unlock a common cloud operating model to provision, secure, connect, and run any application on any infrastructure. HashiCorp tools allow organizations to deliver applications faster by helping enterprises transition from manual processes and ITIL practices to self-service automation and DevOps practices. 

PARTNER

IBM is a leading global hybrid cloud and AI, and business services provider. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM’s hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM’s breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM’s legendary commitment to trust, transparency, responsibility, inclusivity and service.

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