Cross-Border Payments in Singapore: Connectivity, Challenges and Regulation

Cross-border payments are more complex than domestic transfers because transactions can involve multiple financial institutions, payment infrastructures, currencies and regulatory requirements.

Singapore has been working to reduce these frictions through bilateral payment linkages and broader regional initiatives. Its connectivity has expanded beyond the PayNow-PromptPay linkage with Thailand launched in 2021, while Project Nexus has progressed from a BIS Innovation Hub project toward implementation through Nexus Global Payments.

For businesses and payment service providers, improving payment connectivity is only part of the picture. Providing cross-border money transfer services in Singapore is also a regulated activity under the Payment Services Act 2019 (PS Act).

What Makes Cross-Border Payments Challenging?

Domestic instant payment systems can move funds quickly within their own jurisdictions. Cross-border payments are more complex because different national systems, currencies and regulatory frameworks need to interact.

Depending on the payment arrangement, challenges can include:

• differences between domestic payment infrastructures;
• currency conversion;
• transaction costs;
• settlement arrangements;
• anti-money laundering and regulatory requirements;
• differences in technical standards; and
• limited interoperability between payment systems.

These issues are particularly relevant for businesses operating across multiple markets, where payment friction can increase costs and complicate transactions with customers, suppliers and other counterparties.

Interoperability can address part of this problem by enabling different payment systems and participating institutions to communicate through common technical and operational arrangements.

Singapore’s Cross-Border Payment Connectivity

Singapore has pursued several payment connectivity initiatives with regional partners.

Rather than creating entirely separate payment networks, some of these initiatives connect existing domestic payment infrastructures so users can make cross-border transactions through familiar banking or payment applications.

Singapore and Thailand: PayNow-PromptPay

Singapore and Thailand launched the PayNow-PromptPay linkage in April 2021.

The linkage connected Singapore’s PayNow and Thailand’s PromptPay real-time retail payment systems, allowing customers of participating institutions to make cross-border transfers using a recipient’s registered mobile number.

It represented an early example of connecting national real-time payment systems for retail cross-border transfers.

Singapore and Malaysia: PayNow-DuitNow

Singapore subsequently expanded its payment connectivity with Malaysia.

The PayNow-DuitNow linkage, launched in November 2023, connects Singapore’s PayNow with Malaysia’s DuitNow, enabling customers of participating financial institutions to make person-to-person cross-border fund transfers.

The linkage demonstrates how existing national instant payment infrastructure can be connected without requiring users to rely on entirely separate cross-border payment channels.

Singapore and Indonesia: QR Payment Connectivity

Singapore and Indonesia launched a cross-border QR payment linkage in November 2023.

Customers of participating financial institutions can use their existing payment applications to scan QRIS codes in Indonesia or NETS QR codes in Singapore.

The arrangement is particularly relevant to retail payments and tourism because merchants can receive cross-border payments through existing QR payment infrastructure.

The initiative illustrates another form of interoperability. Instead of connecting person-to-person transfer systems, participating providers enable customers to transact across compatible national QR payment arrangements.

Project Nexus and Multilateral Payment Connectivity

Bilateral payment linkages can improve connectivity between two markets, but establishing separate technical connections for every pair of countries can become increasingly complex as the network expands.

Project Nexus was developed by the BIS Innovation Hub Singapore Centre to explore a more scalable approach to connecting domestic instant payment systems.

Instead of requiring a payment system to establish a separate custom connection with every other participating jurisdiction, the Nexus model is designed around a standardised multilateral framework.

The BIS Innovation Hub’s work on Project Nexus has now concluded.

Following the development of the technical blueprint, governance arrangements and other components of the model, the project moved toward implementation. In 2025, the central banks of India, Indonesia, Malaysia, the Philippines, Singapore and Thailand incorporated Nexus Global Payments (NGP) in Singapore to operationalise the Nexus scheme.

The transition marks an important development for the project. Work has moved beyond demonstrating the technical feasibility of multilateral payment connectivity toward establishing the infrastructure and operating arrangements required for implementation.

How Project Nexus Could Address Cross-Border Payment Friction

The Nexus model is intended to improve the speed, cost, transparency and accessibility of cross-border payments by standardising how participating instant payment systems connect.

According to the Bank for International Settlements’ Project Nexus information, the model is designed to enable cross-border payments from sender to recipient within approximately 60 seconds in most cases.

A multilateral model can potentially reduce the need for individual payment systems to establish and maintain numerous bilateral integrations.

However, greater technical connectivity does not remove regulatory obligations. Participating institutions must continue to comply with applicable financial regulation, anti-money laundering and countering the financing of terrorism requirements, sanctions controls and other legal obligations.

Cross-Border Money Transfers Are Regulated in Singapore

For FinTech companies and other payment service providers, developments in payment infrastructure should be considered alongside Singapore’s licensing framework.

Under the Payment Services Act 2019, a cross-border money transfer service is one of seven regulated payment services.

The seven regulated payment services are:

1. account issuance service;
2. domestic money transfer service;
3. cross-border money transfer service;
4. merchant acquisition service;
5. e-money issuance service;
6. digital payment token service; and
7. money-changing service.

A business carrying on a cross-border money transfer service in Singapore generally requires an appropriate payment services licence unless an exemption applies.

Which Licence Applies to Cross-Border Money Transfer Services?

Depending on the scale and combination of regulated payment services provided, a cross-border money transfer provider may fall within the:

• Standard Payment Institution (SPI) Licence; or
• Major Payment Institution (MPI) Licence.

The appropriate licence depends on the business’s activities and the applicable statutory thresholds and requirements.

Under the current Payment Services Act, an MPI licence is generally required where the average monthly value of payment transactions exceeds:

• S$3 million for any one specified payment service; or
• S$6 million for two or more specified payment services,

subject to the scope and calculation rules set out in the legislation.

Cross-border money transfer service is among the specified payment services relevant to these thresholds.

Businesses should not rely on transaction value alone when determining their licensing position. The services being provided, how funds move through the business and other statutory requirements should also be assessed.

The current statutory requirements can be reviewed through the Payment Services Act on Singapore Statutes Online.

What Should a Cross-Border Payment Provider Consider?

A company planning to provide cross-border payment services in Singapore should assess its regulatory position early in the development of its business model.

What payment service is actually being provided?

The commercial description of a product does not determine its regulatory classification.

A provider should assess whether its activities constitute cross-border money transfer, domestic money transfer, merchant acquisition, account issuance or another regulated payment service under the PS Act.

What transaction volumes are expected?

Projected transaction volumes can affect whether the business falls within the SPI or MPI licensing framework.

Businesses should also monitor transaction volumes as they grow to determine whether their existing licensing position remains appropriate.

Will the business provide multiple payment services?

A FinTech platform may perform more than one regulated activity.

For example, a business model could involve both account issuance and cross-border money transfer services. The complete service offering and flow of funds should therefore be assessed rather than considering each product feature in isolation.

How will customer money be handled?

Payment providers should understand how funds are received, held, transferred and settled through their systems.

This is particularly relevant because additional regulatory requirements, including safeguarding requirements, can apply depending on the licence and services provided.

What compliance controls are required?

Cross-border payment providers may interact with customers, beneficiaries and counterparties across multiple jurisdictions.

Their compliance frameworks should therefore address applicable requirements relating to areas such as:

• customer due diligence;
• anti-money laundering and countering the financing of terrorism;
• transaction monitoring;
• sanctions screening;
• record keeping; and
• regulatory reporting.

The precise requirements will depend on the provider’s regulated activities, licence and risk profile.

The Direction of Cross-Border Payments in Singapore

Singapore’s approach to cross-border payments has evolved considerably since the PayNow-PromptPay linkage was launched in 2021.

Regional payment connectivity has expanded, QR payment interoperability has become operational with Indonesia, and Project Nexus has progressed toward a multilateral model for connecting domestic instant payment systems.

These developments can help reduce some of the technical friction associated with moving money across borders. At the same time, greater connectivity does not reduce the importance of financial regulation.

Businesses intending to provide cross-border money transfer or related payment services in Singapore should establish which activities are regulated and what MAS licensing and compliance requirements apply before commencing those services.

How Alder Corporate Services Can Help

Businesses developing payment services in Singapore may need to assess their proposed activities against the Payment Services Act before applying for an MAS licence.

Alder Corporate Services can assist with:

• assessing applicable payment service and licence requirements;
• supporting Standard Payment Institution and Major Payment Institution licence applications;
• reviewing application and supporting documentation;
• assisting with regulatory correspondence relating to licence applications; and
• providing ongoing compliance support after licensing.

Businesses can contact Alder Corporate Services to discuss payment services licensing and regulatory requirements.

Frequently Asked Questions