Bank account holders in S'pore can make QR-code payments in Indonesia by second-half 2023: MAS

The linkage will allow users from Singapore to make instant and secure retail payments to Indonesian merchants. PHOTO: ST FILE

SINGAPORE - 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 on Monday (Aug 29) that they would 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 2023.

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 would help empower individuals and small- and medium-sized businesses, to conduct cross-border trade, e-commerce, and financial activities more efficiently.

It would 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.

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

The central banks said it 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.

Mr Perry Warjiyo, governor of BI, said the initiatives mark a key milestone in strengthening bilateral financial cooperation between Singapore and Indonesia.

In July, Mr Warjiyo had said during a panel 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. 

Creative technologist Heider Ismail, 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. So it means I need to constantly make sure its topped up. 

“Being able to pay directly from my Singapore bank account will definitely be much more convenient,” the 33-year-old Singaporean said. 

Music teacher Sarah Tan, in her 30s said that for her, the ability to utilise cashless payments from banking apps on her phone would definitely make it easier to shop. 

“With the exchange rates, it can be confusing to keep track of how much cash I’m using. 

“But since it’s easier to just scan the QR codes now, I’ll also have to be careful not to overspend.”

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