Financial regulators in Singapore and Indonesia have started working on a cross-border linkage that will allow QR payments between the two neighbours.
In a joint statement, the Monetary Authority of Singapore (MAS) and Bank of Indonesia (BI) say the effort is part of an Asean-wide payments connectivity effort, and will allow the use of local currencies for bilateral transactions.
The linkage, which is expected to launch by the second half of 2023, will provide more options for users in cross-border payment transactions, and will benefit individuals and businesses, particularly micro, small and medium enterprises (MSMEs).
BI governor Perry Warjiyo says the linkage will serve as a key to improving transaction efficiency, promoting digital economic and financial inclusion, and strengthening macroeconomic stability.
“Bank Indonesia believes that the initiatives mark a key milestone in strengthening bilateral financial cooperation between Singapore and Indonesia,” he adds.
MAS director Ravi Menon says the linkage is another step towards the goal of payments connectivity across the entire Asean region by 2025.
“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,” Menon adds.
Once the linkage is operational, users in either country will be able to make instant, secure, and efficient retail payments by scanning QRIS codes, Indonesia’s Quick Response Code Indonesian Standard, or NETS QR codes, Singapore’s QR code solution operated by Singapore electronic payment network NETS, displayed by merchants.
The latest cross-border QR payments scheme follows similar linkages established among different countries in the region. Earlier this year, Indonesia and Malaysia, through their respective central banks, launched a similar QR-based cross-border linkage. Malaysia likewise has a cross-border QR payment linkage programme with Thailand, which was launched in June 2021.
Singapore through MAS also forged its own cross-border QR code payment linkage with the Philippines in November 2021.