Promoting the use of local currencies for bilateral transactions
Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) today 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. This linkage, which is targeted 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 NETS QR codes displayed by merchants.
This payment connectivity between Indonesia and Singapore will empower individuals and businesses, particularly micro, small and medium enterprises (MSMEs), to conduct their cross-border trade, e-commerce, and financial activities more efficiently. It will also support tourism growth as international travel resumes. There are sizeable traveller flows between the two countries – 1.9 million arrivals in Indonesia from Singapore and 3.1 million arrivals in Singapore from Indonesia.
This QR code linkage is made possible with the collaboration of industry representatives from both countries under the joint stewardship of BI and MAS. This includes the Indonesian Payment System Association (ASPI), RAJA (Rintis, Artajasa, Jalin, and Alto), and NETS.
BI and MAS also signed a Memorandum of Understanding (MOU) today to promote the use of local currencies in bilateral transactions such as trade and direct investments. This is in line with ASEAN financial integration efforts to facilitate the wider use of local currencies in intra-ASEAN trade and investment settlement. This can help businesses reduce their exposure to exchange rate risks and costs of conducting bilateral transactions.
Perry Warjiyo, Governor of BI, said on this occasion, “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. This initiative links cross-border payments through the interconnection of national QR codes of payment between two countries, represents another milestone of the Indonesian Payment System Blueprint 2025, and integrates with the framework to promote the use of local currencies. It provides more options for users in cross-border payment transactions and serves as a 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.” Ravi Menon, Managing Director of MAS, said, “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. This linkage also aligns with the G20’s efforts to address existing frictions in global cross-border payments and support post-pandemic economic recovery and growth. The MOU to promote the use of local currencies for bilateral transactions complements the QRIS-NETS QR code payments connectivity as it will further facilitate the settlement of bilateral transactions between Singapore and Indonesia in their respective local currencies.”
Tags: ASEANBank IndonesiaMAS
