ASEAN Interoperability! Singapore opens up cross-border payments with Indonesia and Malaysia! : What are the platform companies for three-way payments in India

Singapore and Indonesia have joined hands to launch a cross-border QR code payment link, enabling users of PayNow in Singapore and DuitNow in Malaysia to make peer-to-peer fund transfers. The initiative, launched by Monetary Authority of Singapore (MAS) Executive Director Ravi Menon together with his Indonesian and Malaysian counterparts at the Singapore FinTech Festival, marks a new step towards the ASEAN vision of regional payments connectivity.

**01 Cross-border QR code payments launched between Singapore and Indonesia**

Bank Indonesia (BI) and MAS announced in a joint press release that the link will allow customers of participating financial institutions in both countries to make retail payments by scanning QR codes. Customers can use their existing mobile banking apps to make payments by scanning QRIS (Quick Response Indonesian Standard) or NETS QR codes displayed at merchants in Indonesia and Singapore.

The Central Bank said that this cross-border QR code payment connection is an important milestone for BI and MAS to promote greater integration of the digital economy and financial ecosystems, as well as to strengthen Indonesia's economic connectivity with Singapore.The QRIS-Nets QR code payment connection provides greater ease of payment, enabling micro and small businesses to reach new customer segments in each other's economies.

BI and MAS noted that the rebound in tourist arrivals from both countries after the outbreak, with 600,000 Singaporean tourists travelling to Indonesia in the first half of this year and 1.1 million Indonesian tourists travelling to Singapore, will benefit from the payment connection.

Participating financial institutions in Singapore include OCBC Bank and United Overseas Bank, with DBS Bank expected to join later. Participating financial institutions in Indonesia include Bank Central Asia, Superbank, Bali Local Development Bank, Banco Popular, Bank Shin Kong, Bank Islam Indonesia, CIMB Niaga, Espay Debit Indonesia Koe, Netzme Kreasi Indonesia and PermataBank.

BI Governor Perry Warjiyo said the link will facilitate "faster, cheaper, more transparent and inclusive cross-border payments", in line with ASEAN's objective to enhance regional payments connectivity. Indonesia for cross-border e-commerce activities and tourism spending by individuals and small businesses.

**Singapore-Indonesia Local Currency Settlement Framework**

In addition to payment connectivity, Singapore and Indonesia have signed a letter of intent to establish a "Local Currency Settlement Framework". The framework, which is scheduled for implementation in 2024, will facilitate cross-border payments between Indonesia and Singapore using their respective local currencies, including QR code payments, trade and investment.

BI and MAS said, "This will help businesses and other users to reduce foreign exchange risks and costs." The signing of this letter of intent follows the signing of a Memorandum of Understanding (MoU) between the two parties in August 2022, which involves a framework of co-operation to facilitate bilateral transactions in local currencies between central banks, in line with ASEAN's wider efforts to use local currencies in internal transactions.

**02 Singapore-Malaysia Direct Transfer**

In March this year, Malaysia and Singapore launched QR code payment connectivity, allowing customers to make cross-border payments to merchants using PayNow in Singapore and DuitNow in Malaysia. On Friday, MAS and Bank Negara Malaysia (BNM) announced that users of these payment services can now make peer-to-peer cross-border funds transfers using their mobile phone numbers and virtual payment addresses.

Customers of participating financial institutions can use this method to send and receive up to SGD1,000 (USD744) or MYR3,000 per day.MAS and BNM said the PayNow-DuitNow connection allows for secure and cost-effective personal fund transfers and remittances between the two countries. This real-time payment system connection is also the first of its kind to include the participation of non-bank financial institutions from both countries, providing access to a wider group of users.

Participants in Singapore include Liquid Group, Maybank Singapore, OCBC Bank and UOB, while those in Malaysia include CIMB Bank, Maybank and TNG Digital. they will eventually be joined by Singapore's DBS Bank and Malaysia's OCBC Bank.

MAS and BNM described the link as "an important milestone in improving the cost, speed, accessibility and transparency of cross-border payments". Personal and remittance transactions between the two countries reached S$2.3 billion last year, according to Central Bank data.

Mr Menon said, "The PayNow-DuitNow connection embodies Singapore and Malaysia's shared desire to facilitate cross-border payments between the two countries. This connection marks another step towards the vision of payment connectivity in the ASEAN region."

Abdul Rasheed Ghaffour, Governor of Bank Negara Malaysia, added: "Fast, secure and low-cost cross-border payments can bring significant benefits to countries with strong economic ties like Malaysia and Singapore. the PayNow-DuitNow connection enables us to deliver these benefits for our mutual growth and prosperity. It also lays the foundation for a scalable cross-border payments network within ASEAN and beyond."

In 2022, the central banks of Indonesia, Malaysia, the Philippines, Thailand and Singapore agreed to strengthen and enhance co-operation on payments connectivity, with the Central Bank of Vietnam signing an agreement to join them earlier this year.

Last year, Singapore's PayNow and Thailand's PromptPay established the world's first alliance of electronic payment systems, allowing residents of the two countries to make instant cross-border electronic transfers using their phone numbers, cutting transaction times to less than five minutes. Some money-changing merchants say outright that this is a crushing blow that requires an early transition.

Menon said the framework will complement payment connectivity. He added: "These initiatives mark milestones in the growing cross-border payments connectivity between Singapore and key regional economies. These connections will also provide strong support for the development of the ASEAN digital economy and the building of the financial ecosystem."

The cross-border payment connections between Singapore and Indonesia and Malaysia are an important step towards regional payment connectivity, providing greater convenience and choice for individuals and businesses in both countries to make payments. These connections will also help drive the development of the digital economy and financial ecosystem in the region, bringing more opportunities and benefits to individuals and small businesses in both countries.

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