Singapore-Indonesia QR payment link in the works

Businesses and individuals with Nets-linked bank accounts here will soon be able to use their smartphones to make QR code payments in Indonesia.

The Monetary Authority of Singapore (MAS) and Bank Indonesia (BI), Indonesia's central bank, said in a joint statement yesterday that they will be commencing work on a cross-border QR payment linkage between the two countries.

It is set to be launched in the second half of next year.

The linkage will allow users from Singapore to make instant and secure retail payments by scanning Quick Response Code Indonesian Standard (QRIS) displayed by Indonesian merchants.

Conversely, businesses and individuals from Indonesia will be able to scan QR codes provided by e-payments service provider Nets in Singapore.

The central banks said the move will help empower individuals and small and medium-sized businesses to conduct cross-border trade, e-commerce and financial activities more efficiently. It will also support tourism growth as international travel resumes.

Singapore had enabled cross-border QR payments with Thailand in 2019, following an agreement between Thailand's Siam Commercial Bank and Singapore-based fintech start-up Liquid Group.

The partnership allowed Thai tourists to pay for purchases in Singapore using their own Thai QR payment apps.

Yesterday, MAS and BI also signed a memorandum of understanding (MOU) to promote the use of local currencies in bilateral transactions such as in trade and direct investments.

The central banks said this is in line with financial integration efforts by Asean to encourage the wider use of local currencies in trade and investment settlement around the region.

They added that this could also help businesses reduce their exposure to exchange rate risks and reduce the cost of conducting bilateral transactions.

Last month, BI governor Perry Warjiyo said during a panel discussion on the sidelines of the Group of 20 (G-20) meetings in Bali that five of the region's biggest economies - Singapore, Thailand, Indonesia, Malaysia and the Philippines - would be integrated by November. The G-20 comprises the European Union and 19 countries with the biggest industrialised and emerging economies.

MAS managing director Ravi Menon said the QRIS-Nets QR code payments connectivity is a milestone in Asean's goal to establish regional payments integration by 2025 and support the vibrant cross-border trade corridors within the region.

"This linkage also aligns with the G-20's efforts to address existing frictions in global cross-border payments and support post-pandemic economic recovery and growth," he said.

Mr Menon added that the MOU complements the QRIS-Nets QR code payments connectivity, saying it will further facilitate the settlement of bilateral transactions between Singapore and Indonesia in their local currencies.

Singaporean Heider Ismail, 33, a creative technologist who travels to Indonesia twice a month to visit his partner, welcomed the news.

"I currently use my Grab card, which links to my Grab account. It means I need to constantly make sure its topped up," he said.

"Being able to pay directly from my Singapore bank account will definitely be much more convenient."