Singapore, Indonesia, Malaysia Launch Cross-Border Payment Linkages

Singapore, 17 November 2023 – The cross-border quick response (QR) payment linkage between Singapore and Indonesia was inaugurated on Friday by Bank Indonesia (BI) and the Monetary Authority of Singapore (MAS). Through this connectivity, consumers of participating financial institutions can easily make cross-border retail payments by scanning the QR codes shown by merchants in Singapore or Indonesia, respectively, using their current mobile banking applications. At the Singapore FinTech Festival 2023, MAS Managing Director Ravi Menon and BI Governor Perry Warjiyo jointly unveiled the connectivity by executing live cross-border QR payments.

Similarly, MAS and Bank Negara Malaysia (BNM) too have jointly launched a real-time payment systems linkage between Singapore’s PayNow and Malaysia’s DuitNow. The initiative follows the QR payment linkage announced on 31 March 2023 which enabled cross-border QR payments to merchants. MAS Managing Director Mr Ravi Menon and BNM Governor Mr Abdul Rasheed Ghaffour marked the launch by executing live cross-border fund transfers to each other.

The cross-border QR payment linkage by BI and MAS is a significant milestone in the efforts 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 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 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 2022 and is in line with ASEAN financial integration efforts to facilitate the wider use of local currencies in intra-ASEAN transactions.

Speaking about the initiative, 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.”

This QRIS-NETS QR payment linkage has been made possible through strong industry collaboration championed by BI and MAS, alongside close partnerships with the Indonesian Payment System Association (ASPI), RAJA (Rintis, Artajasa, Jalin, and Alto), Network for Electronic Transfers (Singapore) Pte. Ltd (NETS) and participating financial institutions.

As far as Singapore and Malaysia are concerned, the PayNow-DuitNow linkage enables instant, secure and cost-effective P2P fund transfers and remittances between the two countries. This real-time payment systems linkage is also the first to include the participation of non-bank financial institutions from both countries, providing access to a broader group of users. Consumers of participating financial institutions are now able to send and receive funds of up to S$1,000 or MYR3,000 daily by using the recipient’s mobile phone number or VPA.

The service will be made available to Singapore customers of Liquid Group, Maybank Singapore, OCBC and UOB under a phased approach, where these institutions will progressively increase the number of eligible user groups from today until end-January 2024. This is to support customers’ familiarisation with the service. For users in Malaysia, the service will first be available for all CIMB, Maybank and TNG Digital users with other financial institutions gradually onboarded thereafter.

The PayNow-DuitNow linkage is an outcome of extensive collaboration among the central banks, payment system operators, scheme owners, and participating financial institutions of both countries. It is an important milestone in improving the cost, speed, access and transparency of cross-border payments. Users from both countries will benefit from the linkage’s cost-effectiveness, inclusivity and accessibility. It is also aligned with the objectives of the ASEAN Payment Connectivity Initiative and the G20 Roadmap for Enhancing Cross-border Payments. In 2022, P2P and remittance transactions between the two countries stood at S$2.3 billion/MYR7.8 billion.

MAS MD Mr Ravi Menon said, “The PayNow-DuitNow linkage is the culmination of a shared aspiration by Singapore and Malaysia to facilitate cross-border payments between the two countries. This linkage represents another step towards ASEAN’s vision for regional payments interconnectivity.”

BNM Governor Datuk Abdul Rasheed Ghaffour added, “Cross-border payments that are fast, secure and cost-efficient can provide immense benefits especially for individuals and small businesses in countries with very close economic ties such as Malaysia and Singapore. The PayNow-DuitNow linkage enables us to reap these benefits towards our shared growth and prosperity, while laying the foundations for scalable cross-border payment networks across and beyond ASEAN.”