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Singapore and Malaysia launch QR code payment linkage

Kuala Lumpur, Malaysia: Singapore-headquartered OCBC Bank is among the financial institutions participating | Credit: Engin Akyurt; Pixabay

A QR code payment linkage has launched between the neighbouring nations of Singapore and Malaysia in the latest cross-border retail payments breakthrough in Southeast Asia.

The move will enable in-person payments through the scanning of physical QR (quick response) codes displayed by merchants, as well as online cross-border e-commerce transactions. An expansion to person-to-person (P2P) payments is planned later this year.

The linkage is described by the Monetary Authority of Singapore (MAS) and Bank Negara Malaysia/Central Bank of Malaysia (BNM) as a ‘key milestone in the collaboration between Singapore and Malaysia to enhance cross-border payments connectivity’. It will provide merchants and consumers with a ‘more seamless and efficient means to make and receive payments’, the authorities state in their announcement.

Singapore is an island city-state with a population of about 5.6 million, while Malaysia is home to about 33 million people. The two nations are connected by two bridges – the Johor–Singapore Causeway and the Malaysia–Singapore Second Link (officially known as Tuas Second Link in Singapore) – which handle daily commuter flows.

The QR code initiative is part of the authorities’ commitment to improve the cost, speed, access and transparency of cross-border payments in line with both the ASEAN (Association of Southeast Asian Nations) Payment Connectivity Initiative and G20 Roadmap for Enhancing Cross-Border Payments.


Participating financial institutions

The QR code linkage works via the scanning of either NETS QR or DuitNow QR codes. The former is the QR code operated by Singapore’s electronic payment network, NETS. The latter is Malaysia’s equivalent. Both QR codes allow merchants to accept payments from customers of participating banks and e-wallet operators using a unified QR code.

In order to take advantage of the scheme, users will need to be customers of participating financial institutions. Participants (at the time of the scheme’s launch) from Singapore are: DBS Bank, OCBC Bank and UOB. Participants from Malaysia are: AmBank Malaysia Bhd, Boost, CIMB Bank Bhd, Hong Leong Bank Bhd, Malayan Banking Bhd, Public Bank Bhd, Razer Merchant Services, TNG Digital Sdn Bhd and United Overseas Bank Malaysia Bhd.

In the next phase, MAS and BNM are looking to expand the linkage to enable cross-border account-to-account fund transfers and remittances.

This will allow users to make real-time fund transfers between Singapore and Malaysia using just the recipient’s mobile-phone number. This service is expected to go live before December 2023.


Southeast Asia’s payments progress

The Singapore-Malaysia QR code linkage is the latest to be established in Southeast Asia.

Bank of Thailand (BOT) and Bank Indonesia launched a cross-border QR payment linkage in August 2021. This came two months after the BOT and Malaysia announced a similar cross-border QR payment linkage.

MAS and BOT, meanwhile, announced the linkage of the former’s PayNow and the latter’s PromptPay real-time retail payment systems in April 2021. This allows customers of participating financial institutions to send payments across the border using just the recipient’s phone number. A similar two-way instant payment systems link was announced between PayNow and India’s Unified Payments Interface (UPI) in February 2023.

MAS managing director Ravi Menon described the Singapore-Malaysia QR code payment linkage as “the latest addition to Singapore’s growing set of cross-border payment linkages” and “an important milestone in ASEAN’s journey towards seamless regional payments connectivity.”

BNM governor Nor Shamsiah Mohd Yunus, meanwhile, said, the Malaysia-Singapore QR code linkage would “benefit millions of commuters across the Causeway as well as business and leisure travellers”, adding that it would  “also be a boost to retail businesses in both countries.” 


Connecting domestic payment systems

MAS and BNM are among the authorities involved in a cross-border payments technology experiment being co-ordinated by the Bank for International Settlements (BIS) Innovation Hub’s Singapore centre that has recently progressed to its next stage.

The connection of replicas of Singapore and Malaysia’s domestic payment systems, as well as that of the Eurosystem (represented by the Banca d’Italia/Bank of Italy), has just been successfully trialled in the ‘Project Nexus’ experiment – testing of a cross-border payments infrastructure model that those involved believe has the potential to be implemented globally.

In Project Nexus’s new phase, MAS and BNM will be joined by Bank Indonesia, BOT and Bangko Sentral ng Pilipinas.

The five Southeast Asian central banks signed a Memorandum of Understanding (MoU) on ‘Co-operation in Regional Payment Connectivity’ in Indonesia in November 2022.

In terms of Nexus specifically, the five central banks ‘share a desire for any real-world implementation to be global rather than regional,’ according to a project report published on 23 March. BIS and the central banks are in the throes of establishing a ‘global advisory panel’ of central banks and payment system operators to advise on the project’s development beyond Southeast Asia.


BIS-led cross-border instant payments project progresses – our news story (23 March 2023) on the recent ‘Project Nexus’ update