Indonesia’s crossborder payments programme with four other ASEAN countries will be fully operational next year, the country’s central bank governor said on Wednesday. The move, which will allow the seamless use of payments apps across the five countries, is set to be transformational, experts told DealStreetAsia.

Perry Warjiyo, governor of Bank Indonesia, said that the country has already connected its payments system with Thailand, and will do so with Malaysia and Singapore soon. The fourth country in the network is the Philippines.  

DealStreetAsia reported in July that Indonesia, Singapore, Malaysia, Thailand, and the Philippines are set to sign a deal to integrate their payments networks by November this year. This would allow customers in any of these five countries to purchase goods in any other country in the network by merely scanning QR codes.

The move marks a milestone in the ASEAN payment connectivity plan, which aims to broaden cross-border, real-time retail payment connectivity among 10 ASEAN member countries by 2025.

“ASEAN payment connectivity will integrate the digital payment infrastructure of each country, including fast payment, open application payment interface (API), and QR code based on local currency settlement (LCS),” Bank Indonesia deputy governor Dody Budi Waluyo told DealStreetAsia.

The payments will be settled in the local currency of the respective country, which means a resident of Indonesia can purchase goods in Singapore using a local payment app and settle his Singapore dollar bill directly in Indonesian rupiah, bypassing the need for the US dollar as an intermediary.

“This collaboration will result in an efficient crossborder payment mechanism for users and parties involved, including banks, fintech firms and payment system service providers,” Waluyo explained.

Bank Indonesia has been conducting a trial for crossborder QR payments linkage with Bank of Thailand since last August, and with Bank Negara Malaysia since January this year.


Commenting on the development, Nailul Huda of the Institute for Development of Economics and Finance (INDEF) told DealStreetAsia: “So far, customers are able to use only credit or debit cards with VISA or Mastercard or Amex logo. But soon, they will also be able to use GoPay, OVO and DANA outside Indonesia. It will help local digital payment users when they do transactions in other SE Asian countries.”

While the move will improve the ease of digital payments and benefit local and international digital payment platforms, it will reduce the volume of crossborder digital transactions, Huda explained. “Crossborder digital payment platforms can be more innovative, perhaps seeking market opportunities in retail digital payments,” he added.

Global remittance and cross-border payment transactions are projected to reach $39.9 trillion by 2026, according to a recent report by Research and Markets. This is even more significant for Southeast Asia, where 400 million people are connected to the Internet.

“Through the QR payment linkage, customers can transfer money to their relatives through local apps, so the costs are lower and the transaction is also more transparent. This will disrupt the remittance sector. Consumers might opt to send money via QRIS rather than Western Union, for example,” said Bhima Yudhistira, director of Jakarta-based think thank Center of Economic and Law Studies.

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