Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS) have launched a cross-border quick response (QR) payment linkage between Indonesia and Singapore.
The collaboration will enable customers of participating financial institutions to make more seamless cross-border retail payments. Using their existing mobile banking apps, they can scan QRIS (Quick Response Code Indonesian Standard) or NETS QR codes, displayed by merchants in Indonesia and Singapore respectively.
In addition to benefitting micro and small businesses the cross-border QR payment linkage is aiming to support 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 Singapore.
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 is expected to 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 2022.
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.”
He added: “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.”