KUALA LUMPUR: Bank Negara Malaysia and Payments Network Malaysia Sdn Bhd (PayNet) are exploring the feasibility of linking the real-time payment systems in Malaysia, Singapore and the euro area.
The central bank has teamed up with international partners on a proof-of-concept, dubbed Project Nexus, to improve the cost and speed of cross-border payments.
The project will enable customers to send and receive cross-border payments instantly and securely.
Bank Negara said the outcome for the project is expected to be published by end of 2022, while informing future development of a global network of real-time payment systems to enable fast and seamless cross-border payments.
Bank Negara assistant governor Fraziali Ismail said that Project Nexus is a positive move for cross-border payments.
"Our participation in Project Nexus underscores Malaysia's commitment to future-proof the country's key payment infrastructures.
"Building on the success of bilateral payment linkages with other Asean countries, this could pave the way for the RPP/DuitNow to connect with other real-time payment systems globally.
"This will support aspirations for faster, cheaper and more accessible cross-border payments for Malaysian residents," he said in a statement today.
PayNet group chief executive officer Peter Schiesser said RPP/DuitNow was a key infrastructure to drive cashless payments and digitalisation in Malaysia.
"We project about one billion real-time payments will be made in Malaysia in 2021. Project Nexus provides us with a unique opportunity to contribute to the design of next-generation payment infrastructure. This will ensure Malaysia is well placed to capitalise on the outcomes of the project," he added.
However, Bank Negara said prototypes developed under the proof-of-concept would not be available for public use at this juncture.
Led by the central bank for International Settlements (BIS) Innovation Hub, Project Nexus is closely aligned with the G20 Roadmap for Enhancing Cross-border Payments.
Other international partners in the project are Banca d'Italia, the Monetary Authority of Singapore (MAS) and the Banking Computer Services Pte Ltd (BCS).
Bank Negara said Malaysia's participation in Project Nexus would complement the country's existing efforts in linking the RPP/DuitNow2 with other real-time payment systems in the Asean region.
Meanwhile, a payment linkage between Malaysia and Thailand was launched in June 2021 to enable instant cross-border QR code payments between both countries.
The services facilitated by the linkage will be further expanded in 2022 to support real-time fund transfers using just mobile numbers.
The central bank said efforts were also underway to establish similar payment linkages with Indonesia and Singapore, which would be launched by the end of 2021 and 2022, respectively.
The enhanced cross-border connectivity of such payment linkages will serve as an important enabler to support closer regional economic and financial integration.