Singapore and Thailand discuss regional digital payments partnership
▶ Cash remains the preferred payment method, but officials are hoping to get in line with other regions
Singapore and Thailand are in discussions about connecting their national digital payment systems to forge an unprecedented regional alliance, as officials step up efforts to curb the use of cash.
The link would unite South East Asia’s first national digital-payment platforms, Singapore’s PayNow and Thailand’s PromptPay, said Naphongthawat Phothikit, the director of payment systems policy at the Bank of Thailand.
“The Monetary Authority of Singapore [MAS] and the Bank of Thailand are exploring the possibility” of a link between the two networks, Mr Naphongthawat said in Bangkok. Discussions are at a preliminary stage, and it is too early to talk about details or a timeline, he added.
The prospective tie-up is the latest effort by Asian nations to modernise the payment process. Governments from India to Indonesia are prodding citizens to pay via cards, mobile devices and internet-based channels, all of which are viewed as more efficient and traceable than physical notes and coins.
The discussions with the Thai central bank on possible collaboration to connect e-payment systems are still at a preliminary stage, Singapore’s monetary authority said. The two sides in July signed an agreement to cooperate on financial technology.
“Initiatives to enable faster and more efficient cross-border financial services within Asean is a positive development for the industry,” the spokesperson said. “MAS encourages more of such cross-border engagements, premised on common standards, to create a seamless and inter-operable digital experience for the Asean community.”
For now, cash remains the dominant mode of payment in much of the region. Some 57 per cent of 4,000 consumers in seven Asian markets said they rely on notes and coins, a PayPal Holdings survey shows. In contrast, digital transactions are prevalent in Europe.
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, Mr Naphongthawat said.
PayNow, introduced by the city-state’s banking association in July, has over 500,000 registrations, according to the Monetary Authority of Singapore.
Both networks allow peerto-peer transfers via banks and enable payments to be made using recipients’ mobile phone or national identity card numbers.
Thailand’s priority is to encourage the wider adoption of modes of payment such as credit cards and mobile-based wallets. Digital-based payment transactions – including electronic fund transfers, e-wallets, credit cards and mobile and online banking – have grown about 30 per cent annually for the past five years.
South East Asia’s banks are girding for a competitive onslaught amid aggressive expansion plans by China’s giant financial technology firms, such as Ant Financial, the payments affiliate of billionaire Jack Ma’s Alibaba Group Holding.
Thai banks have an incentive to bolster digital payments “to ensure they can compete with potential challengers from abroad, including the likes of Alipay and WeChat, which currently serve only Chinese tourists in Thailand”, Mr Naphongthawat said.