Understanding FX and Cross-Border Payments in Singapore (Updated: 2026)

Singapore is a city‑state that punches far above its weight class in global finance and trade. A deep port and trusted legal environment have made it a top‑three FX hub, moving $1.485 trillion in daily trading volume (up 60% since 2022). This is despite a resident population of only around six million people. Merchandise trade in the country is 322% of GDP, and the domestic economy is further powered by world-class firms in finance, logistics and business services.

The country operates an open capital account and a currency regime built around the Singapore dollar nominal effective exchange‑rate (S$NEER). Rather than targeting an interest rate, the Monetary Authority of Singapore (MAS) manages the S$NEER within an undisclosed policy band by buying or selling USD. MAS can adjust the slope, mid‑point and width of this band to tighten or loosen monetary conditions.

Advanced Infrastructure

Singapore’s domestic payments infrastructure is extremely advanced. FAST enables real‑time inter‑bank transfers, while PayNow links bank accounts and e‑wallets via mobile or NRIC numbers. The PayNow network processed roughly 311 million transactions in 2022, and digital wallets are widespread. A 2025 study found that digital wallets accounted for 39% of online spending and 29% of POS spending, up from low single digits a decade ago. Cards still dominate overall, making up 51% of POS payments and 50% of e‑commerce transaction value.

While PayNow enables instant, zero-cost domestic transfers, the vast majority of international payments remain trapped in slow correspondent banking networks. Singapore, more than any other country in the region, is working to spearhead robust solutions, joining together with Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), Bank of Thailand (BoT) and Reserve Bank of India (RBI) to build new infrastructure to “super-charge” the speed of cross-border payments. This project is building on the BIS championed “Project Nexus,” a framework that seeks to standardize the way domestic instant payment systems connect to one another.

MAS Managing Director Ravi Menon captured the stakes in 2023, "It is not enough that we can pay one another digitally within our countries. Be it for migrant workers or students or small and medium enterprises, it is the ability to send money across borders cheaper, faster, and more securely that really matters for efficiency and productivity." Singapore is building the infrastructure to close this gap, having already created several regional “linkages,” but the challenge still remains.

Asia’s FX Gateway

Singapore stands as the financial gateway to Asia. Its FX volumes are more than double Hong Kong ($672 billion) and four times Tokyo ($384 billion). There is good reason for this. The city hosts regional treasuries for multinationals, commodity traders and investment managers. Its large foreign workforce sends significant sums home via remittances, it stands as Asia’s price discovery center during the critical timezone overlap between Tokyo’s close and London’s open, and the largest global banks see it as the most sensible place to host their regional FX teams.

Singapore's dominance masks an ironic challenge: institutions have access to near mid-market rates, while SMEs still pay 0.5-1% markups for unreliable rails. 36% of SMEs report cross-border transaction failures leading to late payments and strained supplier relationships.

The infrastructure exists for instant settlement domestically, but internationally, payments revert to correspondent banking systems that have not caught up. This just goes to show that even in a country as forward looking and advanced as Singapore, creating comprehensive, cross-border rails is a serious challenge.

To understand how Singapore is working to meet this challenge, it helps to look at the core metrics, and learn more about the major institutions that prop up this behemoth: S$NEER, PayNow, and the Stablecoin Framework.

Singapore at a Glance

• Population: 6.11 million people (3.66 million citizens, 1.91 million non-residents) with a median citizen age of 43.7 years. The large foreign workforce (nearly one-third of residents) powers massive remittance corridors to China, India, and Malaysia.

• Economic Output: GDP stood at approximately $547 billion in 2024, with services (finance, transport, tourism) accounting for ~73% of output.

• Trade Orientation: Trade equals 322% of GDP. In 2024 exports totalled about US $504 billion while imports were US $457.52 billion. Major exports include: Electronics, machinery, and mineral fuels. Major export partners include: China, Hong Kong, Malaysia, Indonesia, and the United States.

• FX Market Power: Singapore ranked third worldwide in FX trading in 2025 with average daily turnover of US $1.485 trillion and an 11.8% share of global volume. This was a 60% increase from 2022, when turnover was US $929 billion and the city held a 9.5% global share.

• Foreign Direct Investment: Foreign direct investment (FDI) inflows into Singapore reached U.S. $192 billion in 2024, up 5.6% from 2023. Finance & insurance accounted for 60.4% of FDI inflows, while professional & administrative services, wholesale & retail trade, manufacturing and information & communications made up nearly all the remainder.

• Digital Economy: Singapore’s e‑commerce market generated SGD 22.8 billion in transaction volume in 2024 and is projected to reach SGD 37.5 billion by 2030, growing at about 8% CAGR. Digital wallets accounted for 39% of online spend in 2024 and their share of POS payments rose from 1% in 2014 to 29 % in 2024.

• Remittances: Singapore’s foreign workforce and diaspora drive significant remittances. A 2024 Visa study found that 86% of residents sent or received remittances at least once a year. Half of respondents sent SGD 1,500 or more in 2023. The top destinations for outbound remittances were Mainland China (18%), Australia (13%), and Canada (11%).

S$NEER: A Unique Monetary Policy

Unlike most central banks that target interest rates to control inflation, Singapore’s monetary policy is conducted through the Singapore Dollar Nominal Effective Exchange Rate (S$NEER).

What it is: A trade-weighted index of the Singapore dollar pegged against a basket of major trading partners.

How it works: MAS manages this rate within an undisclosed policy band.

How they do it: MAS can adjust three parameters to achieve policy goals:

• Slope: the rate at which the policy band is allowed to appreciate or depreciate. A steeper slope encourages a stronger Singapore dollar and tightens monetary conditions, a flatter slope does the reverse.

• Mid‑point: the center of the policy band. MAS may re‑center the band to respond to large shocks.

• Width: how much the S$NEER is allowed to fluctuate around the mid‑point. A wider band permits greater volatility.

MAS intervenes in FX markets by buying or selling USD to keep the S$NEER within its band, and may accumulate or expend foreign reserves in the process. This regime targets imported inflation and seeks to maintain external competitiveness.

Interest rates (SORA/SOR) adjust endogenously to movements in the exchange rate and global rates, MAS does not set them directly. This produces a very stable monetary regime in general, but also means that Singapore “imports” volatility from foreign markets.

Fast Domestic Rails and Regional Experimentation

Singapore's domestic payment infrastructure is a gold standard that other countries should seek to emulate.

PayNow, launched July 2017, processed 311 million transactions worth SGD $123 billion in 2022, with adoption reaching 80% of residents and businesses. FAST (Fast and Secure Transfers) provides the real-time settlement infrastructure, and regional expansions are bringing PayNow’s fast settlements across SEA, lowering transaction costs and increasing settlement speeds in these major remittance corridors.

Domestic Rails

FAST (Fast and Secure Transfers) – a real‑time gross settlement infrastructure that enables 24/7 interbank transfers in SGD. It supports large‑value payments within regulatory limits, and has become the backbone for many wallet top‑ups and bill payments.

PayNow – a proxy‑based overlay on FAST that lets individuals and businesses send and receive funds using mobile phone number, national registration identity card (NRIC) number, Unique Entity Number (UEN) or QR codes.

SGQR – a unified QR code introduced in 2018 that combines various e‑wallet and card acceptance schemes into one standard, simplifying merchant acceptance of multiple wallets.

Cross-Border Expansions

Singapore is rapidly expanding its domestic payment rails to meet regional challenges, linking PayNow with other high-speed, cross-border payment systems including:

• PayNow-PromptPay (Thailand)

• PayNow-UPI (India)

• PayNow-DuitNow (Malaysia)

• PayNow-QRIS (Indonesia)

More recently, Project Nexus seeks to take this one step further. Rather than bilateral integrations creating a "noodle bowl" of connections, Nexus uses a hub-and-spoke architecture where each country's instant payment system makes one connection to access all participating jurisdictions. Singapore, Malaysia, Thailand, Philippines, India as founding members, meaning that Nexus represents a combined population of 1.7 billion people.

The system targets live implementation in 2026 with scaled deployment by 2027, promising to reduce remittance costs from 6% toward near-zero while achieving sub-60-second cross-border settlement.

Regulation: The Stablecoin Framework

Singapore's regulatory approach under MAS seeks to balance openness with investor protection, offering room for high quality providers to innovate while reducing retail speculation.

After years of tinkering, the regulator settled on the Stablecoin Framework in 2024.

Fully operationalized beginning in 2025, this framework applies to single-currency stablecoins (SCS) pegged to the SGD or G10 currencies. To qualify for the coveted "MAS-Regulated Stablecoin" label, issuers must hold reserve assets equivalent to 100% of the outstanding value, segregated from their own assets, and ensure redemption at par within five business days. Issuers must also maintain a minimum base capital of S$1 million or 50% of annual operating expenses, ensuring they have "skin in the game".

FX Tailwinds and Stormclouds

This complex environment presents both powerful tailwinds for growth and significant structural challenges.

Tailwinds

Deep liquidity: With US $1.485 trillion in average daily FX turnover and an 11.8% share of global volumes, Singapore offers narrow spreads and a full suite of FX products. Its common‑law system and political stability are also highly attractive to international business.

Advanced domestic payments infrastructure: FAST, PayNow, SGQR and widespread wallet adoption have conditioned consumers and businesses to expect instant, low‑cost payments. The same expectations are spilling into cross‑border FX flows, creating demand for real‑time, low‑fee alternatives to slower rails.

Regional integration: Cross‑border payment links with India, Thailand and Malaysia demonstrate Singapore’s commitment to low-cost, cross-border payments.

Robust FDI and service exports: FDI inflows were dominated by finance and professional services, which generate steady FX flows.. Singapore’s position as a hub for shipping, aviation and commodity trading ensures continual demand for cross‑currency payments.

Stormclouds

High compliance and onboarding costs: MAS requires rigorous licensing and external‑auditor assessments for DPT services. AML/CFT and other consumer‑protection obligations are resource‑intensive, particularly for smaller firms.

Dominant incumbents and concentration risk: A handful of local banks and global FX houses control most liquidity. New entrants face high switching costs for corporates accustomed to incumbent providers.

Thin liquidity in regional pairs: While USD/SGD and other major pairs are deep, currencies like MYR, IDR, PHP or VND still lack direct liquidity in Singapore, often requiring USD hops that add cost and settlement time.

Stringent consumer‑protection stance on digital assets: MAS’s stablecoin framework restricts regulated stablecoins to professional investors, limiting retail participation. Consumer speculation is discouraged, which could slow adoption relative to jurisdictions with lighter regimes.

Macroeconomic sensitivity: Singapore’s open economy is exposed to global cyclical swings. A downturn in global trade or financial markets can quickly reduce FX volumes and capital flows. The S$NEER regime imports foreign monetary conditions, if the US Federal Reserve maintains high rates, domestic liquidity may tighten and growth may slow.

OpenFX Rationale

The gaps between Singapore’s sophisticated domestic payments and its cross‑border pain points to clear opportunities for OpenFX:

• Reduce USD hops and spreads in regional pairs: Many SME and remittance flows still route through USD because regional currencies lack liquidity. OpenFX can provide direct pricing and settlement for SGD against currency pairs not yet covered by linkages.

• Remittances: The significant flows of remittances leaving the country mean that even small reductions in price or increases in speed can have significant, material effects on recipients.

Macroeconomics

Imports / Exports

Sources: Trading Economics, World Bank and national statistics