The Bank of Thailand (BoT) and the Bank of Laos (BoL) have signed an agreement that will allow Thai and Laotian users of digital payments and mobile banking apps to easily scan quick response (QR) codes to pay for goods and services in the two countries.

The agreement – which was signed on the sidelines of the 11th Asean Finance Ministers’ and Central Bank Governors’ Meeting in Luang Prabang, Laos – is Thailand’s sixth such agreement under the Asean Payment Connectivity initiative with an Association of Southeast Asian (Asean) member country after those with Cambodia, Indonesia, Malaysia, Singapore and Vietnam.

There are two phases under the cross-border QR payment linkage agreement. Under the first phase, which began on April 3 2024, users from Laos have started to be able to use the mobile banking applications of participating commercial banks to scan the Thai PromptPay QR code displayed by merchants in Thailand.

And, by the end of June 2024, under the second phase of the agreement, Thais will be able to use mobile banking applications of participating commercial banks to scan the Lao QR code displayed by merchants in Laos.

In a joint statement announcing the development, the two central banks say that with the agreement they hope “to bolster trade, investment, tourism and the use of local currencies (LCY) under the Asean Payment Connectivity initiative”.

The two economies have high hopes that the linkage will have particular benefits in the area of tourism. In 2023, tourists travelling between the two countries reached two million, and that number is only expected to rise in the future.

Under the agreement, the National ITMX of Thailand and the Lao National Payment Network will serve as operators of their respective instant payment systems, while Thailand’s Kasikornbank and Laos’ state-owned bank Banque Pour Le Commerce Exterieur Lao will serve as settlement banks responsible for cross-border settlements.

Commercial banks that will offer the cross-border QR payment service to their customers via their mobile payment applications include two from Thailand – Bank of Ayudhya and Krungthai Bank – and six from Laos – ACLEDA Bank Lao, Agricultural Promotion Bank, Banque Pour Le Commerce Exterieur Lao, Joint Development Bank Lao-Viet Bank and ST Bank.

“The BoT believes that cross-border QR payment service will be a safer, more efficient and cost-attractive alternative for retail payments in Aseam,” says Sethaput Suthiwartnarueput, BoT governor, “thereby promoting economic growth in the region and supporting the transition towards a digital society.”

Bounleua Sinxayvoravong, BoL governor, adds that the collaboration between Laos and Thailand in the realm of financial services is “a reflection of our shared vision for regional integration, economic development and prosperity. And, by harnessing the power of digital innovation, we aim to overcome traditional barriers and facilitate seamless financial flows between our nations.”