For the integration of national digital payment networks, the central banks of Singapore and Thailand have signed a contract. It has the opportunity to increase the role of digital quickly in Thailand, while offering Singaporean consumers with improved utility.
Singapore and Thailand are in discussions about connecting their national digital payment systems to counterfeit an extraordinary regional alliance, as officials step up efforts to limit the use of cash.
The link would bring together Southeast Asia’s first national digital-payment platforms, Singapore’s PayNow and Thailand’s PromptPay, said Naphongthawat Phothikit, director of payment systems policy at the Bank of Thailand.
At the Singapore Fintech Festival, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), indicated that the plan was to link up Singapore’s PayNow and Thailand’s PromptPay, which are both P2P fund transfer platforms in their respective markets.
This ladder allows citizens of both countries to have a hassle free transaction between them to send and receive money both domestically and internationally with just using their mobile number for the transactions. This collaboration brings abundant advantages, easing payments between the countries and likely encouraging bilateral trade, investment, and tourism. “The Monetary Authority of Singapore and the Bank of Thailand are exploring the possibility" of a link between the two networks, said the officials.
"Initiatives to enable faster and more efficient cross-border financial services within Asean are a positive development for the industry," the spokesperson said. "MAS encourage more of such cross-border engagements, premised on common standards, to create a seamless and inter-operable digital experience for the Asean community."
Singapore, while it has a most developed digital payment infrastructure upon its peers in the region, dearth the scale that its bigger neighbors possess, which holds back domestic players such as PayNow.
This tie-up enables a huge opportunity to PayNow for greater stretch, efficacy, and possibly volume if it encourages cross-border payments using the service to and from Thailand.
Even now in Thailand 96.3% of cash payments took place of overall transaction made in 2017 cash according to GlobalData’s Payment Instrument Analytics, this make an emerging needs to increase the use of digital payments. Such a drop would drive revenue for electronic payments players and reduce the costs associated with a cash-heavy economy.
Lack of network benefits makes the country struggle in implementing these digital channels, worthwhile for consumers and SMEs. By potentially expanding the payment network to a host of digitally-savvy Singaporeans at a stroke, the deal has the potential to potentially lift PromptPay use.
“The Bank of Thailand oversaw the January roll out of the PromptPay service by the nation’s banks. It now has 24 million registrations via national identity cards, equivalent to about a third of the Thai population”, Naphongthawat said.
Both networks allow peer-to-peer transfers via banks and enable payments to be made using recipients’ mobile phone or national identity card numbers.
Possibly a regional ASEAN mobile P2P network might form in the medium or long term, which would have stimulating allegations for remittance and potentially even for consumer-to-business payments in the region.
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