Following its cross-border payment agreement with Singapore, the Philippine central bank plans to sign cross-border payment agreements with Thailand and Malaysia to enable integration of their real-time and QR payment systems.
This month, the Bangko Sentral ng Pilipinas (BSP) and the Monetary Authority of Singapore (MAS) signed two agreements to integrate InstaPay from the Philippines and PayNow from Singapore. It is currently in discussions with the Bank of Malaysia (BNM) and the Bank of Thailand (BOT).
BSP Deputy Governor Edna Villa said ASEAN states, along with the Philippines, are rolling out real-time interoperable cross-border payment systems at a virtual BSP-MAS bilateral payment linkage event and the World Fintech Festival 2021 last Friday.
The deputy governor of the BSP then said that the BSP has been in contact with various central banks of ASEAN to ensure a smooth flow of liquidity between our countries. For this link, they chose Singapore as a starting point. During the forum of the event, BSP Senior Director Raymond Estioko of the Payments System Oversight Department said the next cooperation agreements will be with Malaysia and Thailand.
According to Estioko, cross-border currency transactions between the two countries are important. He also revealed that BSP has entered into bilateral discussions with BNM and BOT. In the case of Singapore, remittances between the Philippines and Singapore are expected to reach $ 2.15 billion in 2020. About 900,000 travelers were recorded between the two countries before the pandemic.
The BSP-MAS Enhanced Innovation Function Cooperation Agreement, which was signed on Friday, was first created in 2017 and was primarily intended for information sharing, while the latest version, which Villa has Called “Accord 2.0”, is an improved version. BSP and MAS will be able to link InstaPay and PayNow due to the formal dialogue. “The 2.0 agreement now includes collaboration specifically in payments innovation to facilitate the linking of payment systems in the Philippines and Singapore,” Villa said.
Improved cross-border payments will help Filipino workers abroad, businesses in the tourism, export, import, and e-commerce sectors, and businesses with financial support from overseas affiliates or global institutional investors, according to SP Governor Benjamin E. Diokno.
“We are looking for ways to further reduce the frictions associated with cross-border payments, such as high transfer costs, long processing times, and insufficient transparency about service charges, currency conversion rates and processing status, between others. Ultimately, improving the efficiency of cross-border payments will help ensure that Filipinos, at home and abroad, participate in the continued digital transformation, ”said Diokno.
OpenGov Asia said the collaboration of BSP and MAS in payment infrastructure initiatives is in line with the G20’s efforts to resolve existing frictions in global cross-border payments and helps ASEAN’s goal to achieve the regional integration of payments by 2025. The two central banks will seek multilateral interoperability. of these projects, as part of regional efforts to strengthen ties both within ASEAN and with countries beyond the region.
“The BSP is taking the first step in integrating the Philippine payment system with those of our ASEAN neighbors, starting with Singapore,” said BSP Governor Benjamin E. Diokno. By effectively connecting the country’s real-time QR and payment systems, it will improve the security and efficiency of cross-border payments by enabling faster and smoother international cash movement, thereby benefiting Filipinos who use cross-border payment services. .
Overseas Filipinos, export, import, and tourism businesses, as well as businesses with overseas subsidiaries or investors, may be among the benefactors. PASB is confident that this improved CA will strengthen the Philippines connection with Singapore and bring the ASEAN region closer to establishing an integrated and interoperable cross-border payment system.
Ravi Menon, Managing Director of MAS, then said, “The enhancements to the MAS-BSP FinTech Cooperation Agreement will help accelerate payments connectivity between Singapore and the Philippines. Importantly, linking our QR and real-time payment systems also marks a concrete step towards the vision of an ASEAN network of interconnected real-time payment systems.