SINGAPORE - The central banks of Indonesia and Singapore have officially launched a cross-border QR payment linkage, a major step forward in financial integration between the two Southeast Asian nations. This new system allows users to make retail transactions seamlessly across borders by scanning QR codes through mobile apps, specifically QRIS in Indonesia and NETS in Singapore.
The initiative, which went live today, is part of a broader effort to support economic integration and digital connectivity within the region, with a particular focus on empowering micro and small businesses to expand their customer bases internationally. It aligns with the Association of Southeast Asian Nations' (ASEAN) vision for Regional Payment Connectivity and is in tune with Indonesia's Payment Systems Blueprint 2025.
In addition to the QR payment system, the Bank of Indonesia (BI) and the Monetary Authority of Singapore (MAS) have signed a Letter of Intent (LOI) for a local currency settlement framework expected to commence in 2024. This framework is designed to reduce exposure to exchange rate fluctuations and complements an earlier Memorandum of Understanding (MOU) from August 2022, which aimed at promoting ASEAN financial integration through the use of local currencies for intra-ASEAN trade.
The MAS underscores the importance of this payment linkage for bolstering cross-border e-commerce and tourism spending, which have shown significant growth post-COVID. The implementation of the local currency transaction (LCT) Framework next year will further facilitate trade by providing direct quotations of local currency exchange rates through ACCD banks.
This pioneering project has been bolstered by developmental partnerships with several financial institutions including ASPI, the RAJA consortium (comprising Rintis, Artajasa, Jalin), and Alto Network for Electronic Transfers. With travel statistics indicating a rebound earlier this year, such systems are viewed as crucial for creating more inclusive payment options that cater to the evolving landscape of regional commerce and mobility.
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