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Cross-border payments remain a priority in South-East Asia, as the two states agree on yet another QR code linkage.
Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) have announced the commencement of work on a cross-border QR payment linkage between Indonesia and Singapore as part of the ASEAN-wide payments connectivity effort.
“During Indonesia's G20 Presidency in 2022 and ASEAN Central Bank Governors’ Meeting in April 2022, payment digitalisation and cross-border payments have become a priority agenda,” said Perry Warjiyo, BI’s governor.
The initiative, he said, provides more options for users in cross-border payment transactions. It is also key to improving transaction efficiency, promoting digital economic and financial inclusion and strengthening macroeconomic stability by promoting more extensive use of local currencies for bilateral transactions.
“Bank Indonesia believes that the initiatives mark a key milestone in strengthening bilateral financial cooperation between Singapore and Indonesia.”
This linkage, which is due to be launched in the second half of 2023, will allow users to make instant, secure and efficient retail payments by scanning the QRIS (Quick Response Code Indonesian Standard) or Network for Electronic Transfers (NETS) QR codes displayed by merchants.
The two neighbouring countries hope that this will increase trade opportunities and commerce between them.
In addition, it should boost tourism. According to data from the Central Bureau of Statistics Indonesia and Statistics Singapore, there are sizeable traveller flows between the two countries, with 1.9m arrivals in Indonesia from Singapore and 3.1m arrivals in Singapore from Indonesia in 2019.
This QR code linkage is made possible with the collaboration of industry representatives including the Indonesian Payment System Association and Singapore’s NETS under the joint stewardship of the BI and MAS.
The BI and MAS have also signed a memorandum of understanding (MOU) to promote the use of local currencies in bilateral transactions such as trade and direct investments.
This is in line with financial integration efforts initiated by the Association of South East Asian Nations (ASEAN) to facilitate the broader use of local currencies in intra-ASEAN trade and investment settlement.
“The QRIS-NETS QR code payments connectivity is a milestone in ASEAN’s goal to establish regional payments integration by 2025 and support the vibrant cross-border trade corridors within the region,” said Ravi Menon, managing director of the MAS.
The BI and the Bank of Thailand (BoT) have also confirmed the move from the piloting phase to the implementation phase of their own cross-border QR payment linkage.
The piloting phase began last August, and now 76 payment system providers from both countries will join the project.
“Under this linkage, both Thai and Indonesian consumers and merchants alike are able to enjoy safe, real-time, and cost-effective cross-border payments,” said BoT governor Sethaput Suthiwartnarueput.
