Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) today launched the cross-border quick response (QR) payment linkage between Indonesia and Singapore. This linkage enables customers of participating financial institutions1 to make seamless cross-border retail payments using their existing mobile banking applications to scan QRIS (Quick Response Code Indonesian Standard) or NETS QR codes2 displayed by merchants in Indonesia and Singapore respectively.
This cross-border QR payment linkage is a significant milestone in the efforts by BI and MAS to promote greater integration of the digital economy and financial ecosystem, as well as to boost economic connectivity between Indonesia and Singapore.
With greater payment convenience, this linkage can enable micro and small businesses to tap into a new pool of customers in each other’s economies. It will also benefit a significant number of travellers between the two countries, with travel rebounding post-pandemic – in the first half of 2023, there were 600,000 arrivals from Singapore to Indonesia, and 1.1 million travellers from Indonesia to Singapore3.
BI and MAS have also signed a Letter of Intent (LOI) to establish a local currency settlement framework. When operationalised in 2024, the framework will facilitate the settlement of cross-border payments, including QR payments, trade and investments between Indonesia and Singapore in their respective local currencies.
This will help businesses and other users reduce their exposure to exchange rate risks and costs. The LOI follows the signing of a Memorandum of Understanding on a framework for cooperation to promote bilateral transactions in local currency (LCT Framework) by both central banks in August 20224 and is in line with ASEAN financial integration efforts to facilitate the wider use of local currencies in intra-ASEAN transactions5.
Mr. Perry Warjiyo, Governor of Bank Indonesia said, “Cross-border QR payment linkage between Indonesia and Singapore will promote faster, cheaper, more transparent, and more inclusive cross-border payments, particularly for the benefits of micro, small, and medium enterprises.
“The linkage serves as follow-up of the commitment among ASEAN members on Regional Payment Connectivity, and the Indonesian Payment Systems Blueprint 2025. It provides a more convenient and efficient payment method for users. In our ongoing commitment, we are also excited to announce our strategic initiative to promote a wider use of local currencies in bilateral transactions through the LCT framework, which is expected to be implemented in 2024.
“After LCT Framework implementation, the cross-border QR payment linkage initiative will use direct quotations of local currency exchange rates provided by the Appointed Cross Currency Dealer (ACCD) banks.”
Mr. Ravi Menon, Managing Director of MAS, said, “The QRIS-NETS QR payment linkage will promote cross-border e-commerce activities and tourism spending across Singapore and Indonesia, by individuals and small businesses. The upcoming local currency settlement framework by BI and MAS will complement this payment linkage by facilitating the use of Indonesia Rupiah and Singapore Dollar for the settlement of cross-border payments. These initiatives mark another milestone for Singapore’s growing cross-border payments linkages with key regional economies.”