ASEAN is transforming toward having its very own style payments network like Single European Payments Area (SEPA) following in the footsteps of the European Union, making Southeast Asia an international focal point for cross-border real-time payments.

According to a new report by ACI Worldwide and fintech market research and consulting firm Kapronasia research titled Envisioning a pan-regional real-time payment ecosystem in Southeast Asia, appears into the real-time payments landscape throughout Southeast Asia and the broader Asia Pacific (APAC) region, and delves into the different national payments networks currently in operation.

The real-time payments landscape in Southeast Asia

The past decade has considered economies throughout APAC modernize their payments systems, changing their domestic infrastructure to make payments cheaper, faster, and extra efficient.

Southeast Asia in precise has been making strides in terms of innovation in real-time payments with many regulators launching tools along with instant payments, QR codes, and real-time direct-debit networks.

Singapore launched its Fast And Secure Transfers (FAST) real-time electronic fund transfer service in 2014, allowing individuals and entities alike to conduct electronic transfers in real-time. FAST is operated via the Network for Electronic Transfers (NETS), an electronic payments service provider owned by DBS Bank, OCBC Bank and United Overseas Bank (UOB).

Malaysia introduced the Real-time Retail Payment Platform (RPP) in early 2019 after a multi-year effort to modernize its infrastructure. Payments Network Malaysia (PayNet), which operates the RPP, envisions the platform as one of the portions in enabling cross-border instant credits and peer-to-peer (P2P) payments throughout the ASEAN region, PayNet group CEO Peter Schiesser, said in January 2019. Bank Negara Malaysia (BNM) is PayNet’s single largest shareholder with eleven Malaysian financial institutions.

Linking domestic real-time payments infrastructures

Although these tasks have been mainly targeted on their respective domestic markets, Southeast Asian countries are making efforts to create cross-border linkages, inking a number of biliteral and multi-lateral arrangements.

Such preparations encompass for example the memorandum of understanding (MoU) signed between Southeast Asian payments system operators NETS, PayNet, as properly as National ITMX (ITMX) of Thailand, National Payment Corporation of Vietnam (NAPAS) and PT Rintis Sejahtera (Rintis) of Indonesia, to enable real-time cross-border payments by connecting their respective payments infrastructures.

These operators are members of the Asian Payment Network (APN), an initiative launched in 2006 to function like SEPA. As in the beginning envisioned, the APN would start in the ASEAN countries and eventually grow to include greater nations across APAC.

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Another example is the linkage of Singapore’s PayNow, the peer-to-peer (P2P) fund transfer service launched by the Association of Banks in Singapore (ABS) in 2017, to Thailand’s equal service, PromptPay. It was announced earlier this year that the cross-border link between Singapore and Thailand will be extended to Malaysia’s DuitNow, an instant fund transfer platform.

In Malaysia and Singapore, their respective payments system operators, PayNet and NETS, officially launched real-time, cross-border debit card repayments in late-2019, making utilization of Singapore’s NETS ATM cards viable in Malaysia and usage of Malaysia’s MyDebit ATM cards possible in Singapore.

NETS and PayNet have since been working on connecting their respective real-time payment infrastructures to allow cross-border instant fund transfers and QR payments between Singapore and Malaysia.

QR code repayments interoperability is additionally an vicinity that jurisdictions which includes Thailand and Cambodia have been pursuing. Regulators from the two countries announced in February 2020 that they had been working on a QR code payments initiative that would permit tourists from their respective countries to pay using a mobile app in the other country.

Given all the latest traits being made across ASEAN, it’s probable that real-time, cross-border payments will first become a fact in Southeast Asia before other markets part of the APN, the report says.