New entity to be set up to run PayNow, Giro and other national payment schemes

BUSINESSES and consumers are now using different payment schemes, but they may enjoy more efficiency and seamlessness down the road.

The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) announced on Wednesday (Feb 12) that they will set up a body to consolidate the administration and governance of the country’s eight national payment schemes.

This will “enhance coordination and decision-making across national payment schemes”, enabling financial institutions and payment service providers to better harness opportunities in global payments, and in turn, spur further growth and innovation in Singapore’s payments ecosystem, they said.

The yet-to-be-named entity will also work with MAS to develop the national payments strategy, to ensure a safe, efficient and innovative payments infrastructure.

It will be governed by senior representatives from MAS and the financial services industry, who will provide strategic direction to the entity’s management team. There will also be industry committees formed under the new entity. These committees will engage banks, payment services providers and key user groups such as industry and business associations to support strategy development.

Operations and scheme rules of the national payment schemes will remain unchanged under the new entity.

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Further details on the name of the entity, governance structure and board composition will be announced later this year. 

Different administrators for the payment schemes now

There are eight national payment schemes in operation. They offer a broad range of options for domestic and cross-border payments and are administered and governed by different scheme administrators.

Four are managed by the Singapore Clearing House Association (SCHA). They are Fast And Secure Transfers (Fast), Inter-bank Giro System, Singapore Dollar Cheque Clearing System and US Dollar Cheque Clearing System.

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Another three are administered by ABS – PayNow, eGiro and Electronic Deferred Payment.

The eighth – the Singapore Quick Response Code (SGQR) – is administered by MAS and Infocomm Media Development Authority (IMDA).

More effective and inclusive payment solutions

These schemes need to evolve to meet new and emerging payment needs of consumers and businesses, said MAS and ABS.

“The consolidation of these schemes under a single entity will foster more effective and inclusive payment solutions by both banks and payment-service providers participating in these schemes,” they added.

Resilience and innovation

MAS managing director Chia Der Jiun noted that the move “will strengthen the governance of these schemes and contribute towards greater payments resilience and innovation”.

ABS chairman Piyush Gupta, who is also the chief executive of DBS Group, added that the new payments entity will enable the rationalisation of various payment rails, and “provide a springboard to leverage technology in imagining the future of payments”.

Jacqueline Loh, chairman of SCHA and deputy managing director for corporate development at MAS, said channelling the payment industry’s resources and expertise into a single entity would “ensure consistent implementation of national e-payment strategies across the various payment schemes”.

Another advantage would be a more seamless experience for businesses and consumers, said Leong Der Yao, assistant chief executive for sectoral transformation in IMDA.

He said that IMDA and MAS have developed and advanced the SGQR scheme since 2017 and it is one of the most widely adopted payment systems in Singapore. With a new entity, he expects that there will be room for “greater collaborations with international digital wallets and financial institutions”.