Image Credits: en.tempo.co
Woohoo, Singapore, and Indonesia have launched a new cross-border payment system using QR codes.
This means that customers in both countries can now make retail payments more easily.
The central bank of Indonesia, known as Bank Indonesia (BI), and Singapore’s Monetary Authority of Singapore (MAS), made the announcement yesterday, on 17 November 2023.
They said in a joint statement that financial institutions in Singapore and Indonesia can now link up their QR code payment systems.
This comes a year after BI and MAS first said they were working on such a linkage.
Now it’s a reality!
How to use it?
To use it, customers just need to open their existing mobile banking apps and then scan either a QRIS (Quick Response Code Indonesian Standard) code in Indonesia or a NETS QR code in Singapore, displayed by merchants, to make a purchase.
The central banks believe this linkage is an important milestone as it will help further integrate the digital economies and financial systems of the two countries. It should also boost economic connections between Indonesia and Singapore.
In addition, with QR code payments between nations now possible, it may open up new customers for small businesses since shop owners can now more easily accept payments from people visiting from each country.
BI and MAS pointed out this could benefit travelers
By that, they are referring to the over 600,000 people who have traveled from Singapore to Indonesia in the first half of 2023, including the > 1 million who traveled vice versa, from Indonesia to Singapore.
With the payment linkage, we and our fellow Indonesian friends won’t need to worry as much about having the right currency or payment method when visiting each other’s country.
Who are the participating banks?
And if you’re wondering if your bank is participating initially, be glad to know that OCBC and UOB are. DBS will likely join later.
On the Indonesian side, the participating banks include Bank Central Asia, Bank Mega, Bank Pembangunan Daerah Bali, Bank Rakyat Indonesia, Bank Sinarmas, Bank Syariah Indonesia, CIMB Niaga, Espay Debit Indonesia Koe, Netzme Kreasi Indonesia, and PermataBank.
More banks from both countries may link up their systems over time.
Perry Warjiyo, the governor of BI, said the linkage aligns with ASEAN’s goals of boosting regional payment connectivity.
He believes it will lead to faster, cheaper, and more transparent cross-border payments.
Ravi Menon, the managing director of MAS, agreed that the QR code system will help both individuals and small businesses engage in more e-commerce and tourism activities between the two nations.
A new local currency settlement framework is also in the works
In addition, BI and MAS signed a letter of intent to eventually set up a local currency settlement framework by 2024.
This would allow cross-border payments, including QR payments, as well as trade and investments between Indonesia and Singapore to be settled using their own currencies—the Indonesian rupiah and Singapore dollar.
Settling in local currencies could reduce costs and risks from currency exchange rates for businesses and users.
The central banks are working to promote wider use of local currencies for transactions between ASEAN countries.
These initiatives mark continued progress in growing digital and financial linkages between Singapore and its key regional partners, which is certainly a good thing for you, me, and our economy 😉
