Developments announced by the Monetary Authority of Singapore (“MAS”) on 30th November 2020
Recent developments in Singapore’s move towards a cashless society will see the expansion of two major funds transfer services, Fast and Secure Transfers (“FAST”) and PayNow, to non-bank financial institutions (“NFIs”) from February 2021.
In MAS’ announcement, NFIs licensed as major payment institutions under the Payment Services Act 2019 of Singapore will be able to connect directly with FAST and PayNow. This will allow customers to manage their funds and fund their e-wallets with greater ease.
“Direct access by NFIs to FAST and PayNow closes the last-mile gap in Singapore’s e-payments journey,” said Mr Ravi Menon, Managing Director of MAS. “Our vision to enable complete real-time payments interoperability will now become a reality. Adoption of e-payments will become even easier for individuals and business.”
Improvement to the digital payment landscape for users and businesses
Users are currently required to use their credit or debit card should they wish to add value to their e-wallets with a NFI. However, with the expansion of funds transfer services to NFIs, users will be able to add value from their internet banking platform to their NFI e-wallets through Fast and PayNow without having to use their credit or debit card information.
In addition, users are currently, unable to transfer funds between most e-wallets, a limitation that can be remedied by allowing NFIs to be connected directly to the FAST and PayNow platforms.
Merchants and businesses that partner with any of the 23 FAST or 9 PayNow banks, or e-wallets traditionally in closed-loop ecosystems, will also stand to benefit from the development as they will be able to receive instant e-payments from a larger market of consumers.
Strong transaction volumes of major funds transfer services present a promising digital landscape upon expansion to NFIs
Both FAST and PayNow have recorded large transaction volumes among customers and business users.
FAST, an electronic funds transfer service which allows customers to transfer funds between participating entities instantaneously, averaged transaction volumes of over 12.5 million per month from July to September 2020. In addition, PayNow, an overlay central addressing service that runs on top of the FAST payment system, accounts for almost half of all FAST monthly transaction volumes.
“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 Ai-Boon, Director of The Association of Banks in Singapore (ABS).
Details of the expansion of FAST and PayNow to NFIs
NFIs will connect directly to FAST and PayNow through a new Application Programming Interface (API) payment gateway developed by the Direct FAST Working Group (DFWG), with guidance from the Singapore Clearing House Association (SCHA) and ABS, which oversee FAST and PayNow respectively.
The 9 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.