SINGAPORE - Funds transfer services PayNow and Fast (Fast And Secure Transfers) will soon become more widely used in Singapore, with financial institutions other than banks tapping the platforms.
This is set to make e-payment adoption simpler for both businesses and individuals.
Starting February 2021, eligible non-bank financial institutions will have direct access to the banking system's retail payments infrastructure, said the Monetary Authority of Singapore (MAS) on Monday (Nov 30).
This means that non-bank financial institutions (NFIs) that are licensed as major payment institutions will be allowed to connect directly to Fast and PayNow.
These NFIs include Grab Financial Group, which operates mobile wallet GrabPay; Razer Fintech, the financial technology arm of gaming firm Razer; and e-wallet Singtel Dash.
The direct connection will allow users of NFI wallets to make real-time fund transfers between their bank accounts and e-wallets, as well as between various e-wallets.
Most e-wallets currently require users to top up their funds using debit or credit cards, and do not allow transfer of funds between e-wallets.
MAS managing director Ravi Menon said the move to allow NFIs to have direct access to PayNow and Fast closes the "last-mile gap in Singapore's e-payments journey".
"Consumers who may not have ready access to debit or credit cards to fund their e-wallets will now have the option to do so directly through their bank accounts. Adoption of e-payments will become even more simple for individuals and businesses," he said.
Merchants are also expected to benefit from the move.
Businesses that partner any of the 23 Fast or nine PayNow banks, or e-wallets that have traditionally been closed-loop ecosystems, will soon be able to receive real-time payments from other users of e-wallets or mobile banking applications that will be joining Fast or PayNow.
"This will enable businesses to access a larger market of consumers than before for receiving e-payments instantly and seamlessly," said Singapore's central bank.
The nine participating PayNow banks are Bank of China, Citibank, DBS Bank, HSBC, the Industrial and Commercial Bank of China, Maybank, OCBC Bank, Standard Chartered Bank, and United Overseas Bank.
As for the mechanics of the initiative, NFIs will be able to connect directly through a new Application Programming Interface (API) payment gateway developed by the Direct Fast Working Group.
The group is guided by the Singapore Clearing House Association and the Association of Banks in Singapore (ABS), which govern Fast and PayNow respectively.
ABS director Ong Ai-Boon said this is the first time the industry has opened access to these two important e-payment platforms to non-banks.
"Fast and PayNow adoption rates have exceeded expectations and we are confident that the addition of new players will help accelerate the national path towards a less-cash economy," said Mrs Ong.
Fast transaction volumes averaged more than 12.5 million per month from July to September. Monthly transaction volumes for PayNow made up almost half of all Fast transactions.
Mr Lawrence Chan, chairman of Banking Computer Services, which operates Fast and PayNow, said: "The successful launch of the API payment gateway is a significant milestone for Fast and PayNow, which are the foundation of instantaneous, open and accessible payments."
NFIs said the move will enhance the payments process for their users.
Mr Lim Kell Jay, head of Grab Financial Group Singapore, said: “The integration of Fast and PayNow with GrabPay will greatly enhance the payments experience by giving consumers new ways to seamlessly and securely top-up and transact via GrabPay.”
Likewise, Razer Fintech chief executive Lee Li Meng said the service will make digital payments more convenient and seamless for consumers.
“This concerted push is a testament to Singapore’s vibrant and progressive payments ecosystem,” he said.
Banks said the decision to open access to the payment rails will benefit Singapore’s digital payments environment.
Mr Desmond Tan, head of group lifestyle financing at OCBC, said the bank has nudged small businesses, which have traditionally been the most resistant, to embrace digital payments.
“To achieve this, Singapore must avoid fragmentation by closed-loop app ecosystems. We prefer open, nationwide infrastructures that have universal acceptance across Singapore, and which multiple bank users can ride on together. This will spur Singapore’s digital payments drive and increase our customers’ convenience and adoption of digital payment solutions.”
DBS Singapore country head Shee Tse Koon said: “Making Fast – a secure, instant payment network – available to a broader range of payment providers so both retail and corporate customers have more ways to adopt digital payments, is a positive development we are proud to support.”
Likewise, United Overseas Bank chief Wee Ee Cheong said the bank has championed open and interoperable systems as part of its commitment to improve digital payments.
“Through our ongoing innovation drive at UOB and collaboration with like-minded industry players, we will continue to drive the adoption and usage of digital payments in areas that intersect with where our customers live, play and work,” he said.
Mr Patrick Lee, chief executive of Standard Chartered Bank in Singapore, said the bank will collaborate with non-financial institutions to provide greater access to simpler, seamless and more convenient financial services across its network.
HSBC Singapore chief executive Tony Cripps said that giving non-bank financial service providers access to the Fast network is a major step to offer businesses and individuals greater convenience and choice for real-time and secure digital payments.
Mr Amol Gupte, Citi’s head of Asean and country officer for Singapore, said: “We are pleased to be part of this industry collaboration to give fintech players access to the instant payment rails in Singapore, and excited by the potential innovation that this will bring to consumers and businesses.”
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