Singapore and Malaysia have taken a significant step toward enhancing their economic ties by launching cross-border merchant payments via QR codes. This initiative is set to transform the way businesses and consumers engage in transactions across the two neighboring countries and create a variety of new opportunities for local merchants and entrepreneurs.
In this article, we delve into the details of this groundbreaking development and explore its potential impact on the payments landscape of Southeast Asia - read on for all the details!
What Is the New Payment Linkage All About?
The Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) have collaborated to enable customers of participating financial institutions to make retail payments by scanning NETS QR and DuitNow QR codes.
This NETS-DuitNow linkage enables in-person payments for travelers through scanning physical QR codes displayed by merchants and also facilitates online cross-border eCommerce transactions.
The central banks have emphasized that with pre-pandemic annual traffic averaging
12 million visitors between Singapore and Malaysia, this payment system collaboration will offer a much-needed seamless and efficient means of making and receiving transfers for both merchants and consumers.
Potential Benefits of the NETS-DuitNow Linkage
According to BNS Governor, Tan Sri Nor Shamsiah Mohd Yunus, the QR linkage between Malaysia and Singapore represents a crucial milepost on the way to achieving the vision of an ASEAN network of fast, efficient, and interconnected retail payment systems.
She also mentioned that this initiative is forecast to provide immense benefits to millions of commuters, business and leisure travelers, and retail businesses in both countries, thereby boosting the economy of the entire region.
Here are some of the potential advantages this system is likely to provide:
- Instant transactions. The novel payment service allows for real-time transfers between Singapore and Malaysia, which means that individuals and businesses can make transactions without having to wait for several days for funds to reach the recipient.
- Cost savings. Traditionally, transnational payments involve high fees, conversion rates, and other charges. However, with the new solution, these costs may be significantly reduced, which could benefit businesses and individuals who regularly make cross-border transfers.
- Increased efficiency. The NETS-DuitNow QR code linkage could help to streamline payment processes and reduce errors, which could result in increased efficiency for businesses and individuals and ultimately benefit Singapore’s and Malaysia’s economies.
- Improved access to markets. The Singapore - Malaysia QR code payment linkage could improve access to markets for businesses in both countries. With the help of optimized cross-border payments, businesses may be able to expand their customer base and enter new markets easier than ever before, which could lead to increased revenue and improved scalability.
In addition, as the technology continues to evolve, we are sure to see it deliver even more benefits to all parties involved.
The Future of the Malaysia - Singapore Payment Linkage
While the new linkage is a big milestone in the Southeast Asian payments landscape, it is only the beginning. The service is set to be extended to facilitate real-time P2P fund transfers between Singapore and Malaysia using just the recipient’s mobile phone number via PayNow and DuitNow. This update is expected to go live already by the end of 2023.
Some other potential developments of this system that we might see include:
- Expansion to other countries. The success of the NETS-DuitNow linkage between Malaysia and Singapore could inspire other countries in the region to create similar payment networks. This could lead to a more interconnected and seamless payment system across the region, benefiting businesses and individuals across borders.
- Increased adoption. As more businesses and individuals become aware of the benefits of the new payment service, we can expect to see its increased adoption. This is likely to result in a reduction in the use of traditional payment methods, such as checks and wire transfers, and an increase in electronic transactions.
- Integration with other payment systems. As technology continues to advance, we can expect to see the integration of the NETS-DuitNow service with other payment systems, such as mobile wallets and super apps. This could further improve the convenience and accessibility of this payment solution.
Overall, the future of the Malaysia-Singapore payment linkage looks bright, with potential developments that could further improve the convenience, efficiency, and security of cross-border transactions for businesses and individuals in both countries and the Southeast Asian region as a whole.