Singapore-Thailand payment linkage sets Southeast Asia's digital economy alight

This is particularly important as the digital economy takes a more prominent role — and no more so than in Southeast Asia where, in 2020, 40 million people came online for the first time.

While domestic payments have advanced rapidly in recent years, cross-border payments have struggled to transform. This has brought a myriad of challenges for businesses wanting to move funds overseas including visibility and efficiency in payment times, limited windows, in which to make payments and inconsistency in standards.

Developing consistent industry standards can be achieved in two ways: either when a world power creates a standard that everyone conforms to, or when clusters of interested parties come together to find common ground.

The Monetary Authority of Singapore and Bank of Thailand’s announcement is an example of this bottom-up clustered approach, showing the power of government regulators, digital businesses and multilateral organisations coming together to create tangible frameworks.

Looking ahead we hope to see three things happen:

• The pilot to quickly be rolled out to corporates — via the development of UEN-based (unique entity number) payments and QR code support becoming available.
• Wider bank participation — to enable a larger ecosystem of financial players and large corporate accounts to “plug in”.
• 3Begin to encourage other Asean markets to join — with the end goal of making this a truly regional proposition.

By enabling both corporates and consumers to transact across borders, Southeast Asia is on the brink of reaping the huge potential of its digital economy.

Winnie Yap is head of global liquidity and cash management at HSBC Singapore.