Payments Connectivity in Southeast Asia and Beyond
04 October 2022
The Monetary Authority Singapore (MAS) and Bank Indonesia (BI) are collaborating to implement a cross-border QR code payment linkage. This effort aims to enable individuals and micro, small, and medium-sized businesses (MSMEs) to conduct cross-border banking, e-commerce, and trade activities more efficiently and using local currencies. The link is scheduled to be launched in the second half of 2023.1
In addition to the Indonesian Payment System Blueprint 2025 this is a significant step in advancing bilateral financial cooperation between Indonesia and Singapore.
The initiative also forms part of Singapore’s broader strategy to promote payments connectivity in Asia and beyond:
- Thailand: In fact, cross-border QR code payments between Singapore and Thailand began in 2019 with a collaboration between Thailand’s Siam Commercial Bank and Singapore’s fintech firm, Liquid Group, to enable Thai tourists to make purchases in Singapore using their Thai QR payment app.
- China: Other payment firms have struck similar arrangements with Chinese payment giants, Alipay and Wechat Pay, for Singapore merchants to accept QR code payments from Chinese visitors.
- ASEAN: The authorities in Singapore, Indonesia, Malaysia, the Philippines and Thailand have also announced their intention to integrate the QR code payment systems in the region.
Additionally, MAS has been working with its regional peers to enable fast retail payments using mobile numbers:
- Thailand: Thailand's PromptPay and Singapore's PayNow real-time retail payment systems were linked on 29th of April, 2021. In fact, it is a global first for a project of this nature.2
- Malaysia: In Q4 2022, the quick payment service between PayNow in Singapore and DuitNow in Malaysia will begin.3
- India: MAS and the Reserve Bank of India aim to link Singapore’s PayNow and India’s Unified Payments Interface (UPI) real-time payment systems by the second half of 2022. In order to support future innovation, this initiative would make provisions for larger remittance traffic volumes, involvement of multiple entities, automation of capital control procedures, and enriched message formats.4
MAS is also collaborating with other central banks to leverage blockchain technology to link wholesale payment systems. Under Project Dunbar, MAS has partnered the Reserve Bank of Australia, Bank Negara Malaysia, the South African Reserve Bank and the Bank for International Settlements (BIS) Innovation Hub to develop prototypes for a shared platform that would allow for international settlements using multiple central bank digital currencies (mCBDCs).5
All these collaborations complement the G20, Financial Stability Board, and other international standard-setting bodies' initiatives to make cross-border payment arrangements easier, quicker, less expensive, more inclusive and transparent. They can be likened to the bilateral and regional trade agreements that many countries (including Singapore) entered into to facilitate cross-border trade even as world leaders negotiated global agreements under GATT and WTO. It is hoped that the various payment partnerships will yield similar benefits over time.
1Indonesia and Singapore to Pursue Cross-border QR Code Payments Connectivity and Explore Promoting the Use of Local Currencies for Bilateral Transactions
2Singapore and Thailand Launch World's First Linkage of Real-time Payment Systems
3Singapore’s PayNow and Malaysia’s DuitNow to Link in 2022.
4Singapore’s PayNow and India’s UPI to Link in 2022
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