SINGAPORE: In a significant stride towards fostering economic connectivity and digital integration, Singapore and Indonesia unveiled a cross-border QR code payment linkage on Friday, Nov 17, as reported by Channel News Asia. The initiative enables customers of participating financial institutions in both countries to conduct retail transactions seamlessly by scanning QR codes. This collaborative effort by Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) marks a notable milestone in promoting the integration of the digital economy and financial ecosystem.
In a separate development, MAS and Bank Negara Malaysia (BNM) announced the launch of a real-time payment systems linkage between Singapore’s PayNow and Malaysia’s DuitNow. This enables instant, secure, and cost-effective person-to-person funds transfers and remittances. Users can now make cross-border funds transfers using mobile numbers and virtual payment addresses, with participating financial institutions allowing transfers of up to S$1,000 or RM3,000 daily.
MAS Managing Director Ravi Menon and his Malaysian and Indonesian counterparts launched the links at the Singapore Fintech Festival.
The central banks expressed the importance of the initiative, stating, “This cross-border QR payment linkage is a significant milestone in the efforts by BI and MAS to promote greater integration of the digital economy and financial ecosystem, as well as to boost economic connectivity between Indonesia and Singapore.”
To execute payments, customers can use their existing mobile banking applications to scan QRIS (Quick Response Code Indonesian Standard) or NETS QR codes in Indonesia and Singapore, respectively. This streamlined process enhances payment convenience, benefiting micro and small businesses seeking to tap into new customer bases across borders.
Highlighting the impact on tourism post-pandemic, BI and MAS noted the increased number of tourists between the two nations in the first half of the year, making the payment linkage beneficial for a significant number of travellers.
BI Governor Perry Warjiyo emphasized the positive outcomes of the linkage, stating that it “will promote faster, cheaper, more transparent, and more inclusive cross-border payments,” aligning with the Association of Southeast Asian Nations’ goal of enhancing regional payment connectivity.
Mr Menon added, “The QRIS-NETS QR payment linkage will promote cross-border e-commerce activities and tourism spending across Singapore and Indonesia by individuals and small businesses.”
The financial institutions involved in Singapore for the Indonesia linkage include OCBC and UOB, with DBS expected to join later, while Indonesia boasts participation from Bank Central Asia, Bank Mega, Bank Rakyat Indonesia, and several others.
The participating institutions from Singapore for the Malaysia linkage include Liquid Group, Maybank Singapore, OCBC, and UOB, while CIMB, Maybank, and TNG Digital represent Malaysia, with DBS and Hong Leong Bank set to join later.
According to MAS and BNM, this linkage is crucial in enhancing cross-border payments’ cost, speed, access, and transparency. In 2022, S$2.3 billion in person-to-person and remittance transactions occurred between Singapore and Malaysia.
MAS Managing Director Ravi Menon highlighted the significance of the linkage, stating, “This linkage represents another step towards ASEAN’s vision for regional payments interconnectivity.”
Additionally, BI and MAS signed a letter of intent to establish a local currency settlement framework that will be operational by 2024. This framework aims to facilitate the settlement of cross-border payments, trade, and investments between Indonesia and Singapore in their respective local currencies, reducing exposure to exchange rate risks and costs for businesses. /TISG