Malaysia Works to Enable Real-time Cross-border Payments

A cross-border link between Singapore’s PayNow and Thailand’s PromptPay will extend to Malaysia’s DuitNow, a BNM official said.

BNM (Bank Negara Malaysia) deputy governor Datuk Abdul Rasheed Ghaffour has revealed plans to address gaps in Malaysia’s cross-border payments infastructure.

In a speech on Thursday (6 August), Abdul Rasheed highlighted efforts in in the region to integrate real-time retail payment infrastructures under the ASEAN Payments Policy Framework.

“Bilateral arrangements have also been established by several ASEAN countries, including Malaysia, to enhance the efficiency of cross-border payments,” he said, pointing to a cross-border link between Singapore’s PayNow and Thailand’s PromptPay, saying that the real-time payments link will similarly extend to DuitNow, Malaysia’s instant funds transfer initiative.

“Once operationalised, this could enable cross-border payments between participating financial institutions to be virtually as seamless as domestic transactions.”

According to Abdul Rasheed, BNM is directing working to enhance the safety payment and remittance systems, and build public confidence in e-payment and e-remittance services, particularly among underserved segments.

BNM is also working migrate to ISO 20022, a financial messaging standard developed by SWIFT that is able to capture richer data in a machine-readable format.

“With richer data content, ISO 20022 has the potential to drive greater payments efficiency, facilitate risk management and compliance with regulations as well as facilitate cross-border connectivity,” Abdul Rasheed said.

“This move towards a common global standard will address issues relating to diverging regulatory and technical standards which have increased friction in making payments and made the cross-border payments landscape more complex.”

Earlier this year, Bursa Malaysia implemented the ISO 20022 messaging standards for corporate announcements by listed companies.

Previously BNM had said it had plans to implement the standard for its RTGS, known as RENTAS, in 2020 – but a definitive timeline is not yet known.

Abdul Rasheed’s comments come amid expectations for a 20 percent drop in cross-border transactions in Malaysia.

 

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