Ant International, Grab, StraitsX Explores Use of Digital SGD for Cross-Border Paymentsby Fintech News Singapore November 17, 2023
Ant International, Grab, and StraitsX (part of Fazz) announced a collaboration to look into the potential of Purpose Bound Money (PBM) for cross-border payments.
PBM is a protocol that specifies the conditions upon which an underlying digital currency can be used and first introduced by MAS as part of Project Orchid, which has the potential to lower the cost of payment processing, and the capability for money to be directed towards a specific purpose.
The industry pilot will explore functionalities and interactions of a programmable digital Singapore dollar with existing payment infrastructures to accelerate the payments integration process for merchants and allow them to easily provide payment methods native to non-local customers.
This collaboration aims to enable GrabPay merchants to easily integrate with Ant International’s Alipay+ solutions, accepting payments from a large tourist base.
If successful, this advancement in cross border payment capabilities will expand PBM use cases with the aim of launching in Singapore in 2024.
With Singapore attracting millions of international visitors yearly, this advancement in cross border payments is poised to open up a wider customer base for local merchants, benefitting small and micro merchants in particular.
Generally, smaller merchants in Singapore have only been able to provide a more limited range of payment methods to international travellers. This constraint is often driven by both the lengthy process and the substantial cost involved in integrating new digital payment methods.
By leveraging PBM and a distributed ledger infrastructure, small to micro merchants can more easily serve overseas customers, without the need for new system upgrades nor manual end-of-day reconciliation between accounting systems, thus reducing the hassle of cross border payments integration.
For local and cross-border consumers, the functionalities and interactions of PBM with existing foreign and domestic payment infrastructures also mean that payment experiences remain largely familiar and seamless, without a need for new applications or consumer wallets to be downloaded when making payments.