The big news to come out of Bank Negara and would have ewallet services providers grinning from left to right, is the launching of the cross-border QR payment linkage between Malaysia and neighhbouring country Thailand.
Its a major milestone for the cashless payment system which is very much younger than conventional banking system that took ions before anyone could send money to a bank in a another country. According to BNM under this linkage, consumers and merchants in both countries will be able to make and receive instant cross-border QR code payments. There will be three phases under this initiative, the first phase will be in linking real-time retail payment systems with DuitNow in Malaysia and with PromptPay in Thailand.
Under the first phase, users in Thailand will be able to use their mobile payment applications to scan DuitNow QR codes to make payment to merchants here including for online cross-border e-commerce transactions. These are in preparation for the near future when borders open and tourism resumes, even if the pandemic eases people will continue to be reserved in handling cash making the cashless being a preferred payment method in the foreseeable future. service is expected to benefit more users in both countries when international travel resumes, as they can make payment using their mobile payment applications instead of using cash.
For phase two, users in Malaysia will be able to use their mobile payment applications to scan Thai QR codes to make payment to merchants in Thailand. This phase is expected to go live in the fourth quarter of 2021. The last phase of the linkage will be expanded to include cross-border remittance. Users in both countries will be able to make real-time fund transfers conveniently by referencing the mobile phone number of the recipient. This functionality is expected to go live in the fourth quarter of 2022.
Enabling cross-border QR payment is a key milestone in the ASEAN Payment Connectivity initiative that aims to promotes financial integration in the region through increased efficiency, reduced costs and improved user experience for cross-border payments. Regional leaders have agreed that this payment method will serve as an important enabler to support post-pandemic economic recovery by further strengthening economic ties between participating countries.
In marking this momentous occasion, Datuk Abdul Rasheed Ghaffour, Deputy Governor of BNM, agreed that the retail payment linkage will enhance the efficiency and convenience of cross-border payments by providing users with faster, cheaper, and more inclusive payment arrangements. Mr. Ronadol Numnonda, Deputy Governor of the BOT views the system as a way to facilitate the cross-border trade and e-commerce, while contributing to economic growth and digitalisation.
CIMB Thai Bank and Public Bank Berhad are the first two banks that have participated in the linkage and have started offering the instant cross-border QR code payment service to their customers. More payment service providers are expected to participate in offering such service, broadening the network of users and merchants.