In order to support quicker, less expensive, more transparent, and inclusive cross-border payments, Bank Indonesia (BI), Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Bank of Thailand (BOT) have decided to strengthen and enhance their cooperation on payment connectivity.
On Nov. 14 in Bali, Indonesia, during the G20 Leaders' Summit, a Memorandum of Understanding (MOU) on Cooperation in Regional Payment Connectivity (RPC) was signed. His Excellency Joko Widodo, the president of Indonesia, delivered the keynote address.
President Widodo emphasized the value of concrete and collaborative action in solving global concerns during his remarks at the signing ceremony. The Governors of the five central banks were also thanked by the President for their dedication to making ground-breaking discoveries that will hasten regional payment integration.
Regional connectivity would function utilizing a quick response (QR) code, Indonesia's central bank governor Perry Warjiyo said during the signing ceremony. Additionally, he stated that local currency settlements will be used, removing the need to convert to dollars.
According to Warjiyo, Indonesia connected its QR-code-based payment system with Thailand earlier this year and will soon do the same with other nations. Although there are intentions to expand the relationship to include wholesale transactions and central bank digital currencies, the governor stated that the arrangement only concerns integrating retail payment systems.
Warjiyo stated that the five ASEAN nations' cross-border payments will be connected by next year. Indonesian President Joko Widodo said he anticipated the cross-border payment scheme will be expanded to a global scale in a message through video at the ceremony.
With the G20's establishment of the Roadmap for Enhancing Cross Border Payments, accelerating economic and financial digitalization has become a worldwide priority. The cooperation initiative is also consistent with Indonesia's G20 Presidency priority agenda in the area of digital transformation, including through payment systems in the digital era, as demonstrated by the coordinated efforts of Indonesia, Malaysia, Philippines, Singapore, and Thailand to pursue enhanced cross-border payment connectivity.
This payment connectivity program may be expanded in the future to include additional regional nations as well as potential partner nations beyond the area. The ASEAN (Association of Southeast Asian Nations) chairmanship of Indonesia will begin with this milestone in 2023.
This cooperative effort promotes ASEAN's common goal of integrated payment systems that will make cross-border payments faster, easier, and more inexpensive throughout the region. This initiative sets the foundation for further ASEAN engagement in the near future, strengthening regional economic relations in keeping with ASEAN's pragmatic strategy to enhance integration through mutually advantageous arrangements based on readiness.
