After the G20 Agreement, ASEAN Countries Agree to Strengthen Fast Payment Cooperation

The atmosphere of the ASEAN state central bank governor meeting at the last G20 Bali 2022 Summit (Photo: Doc. Bank Indonesia)

JAKARTA – As a form of commitment to strengthening cross-border payment system connectivity, Bank Indonesia (BI) is collaborating with Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and the Bank of Thailand (BOT) to jointly explore the potential for fast payment-based payment connectivity in the region.

The five ASEAN central banks are collaborating with the Bank for International Settlements (BIS) in exploring the potential for fast payment-based payment connectivity in the region through the implementation of the Nexus Project.

It is noted that this synergy is at the same time a continuation of the Memorandum of Understanding (NK) on Regional Payments Connectivity Cooperation signed by the five central banks on November 14, 2022 ago on the sidelines of the Bali G20 Summit.

BI Governor Perry Warjiyo said that the Nexus Project would be a strategic step as well as a joint effort to establish broader payment system connectivity.

"BI continues to be committed to realizing payment system connectivity that is faster, cheaper, easier, transparent and inclusive," he said in a written statement, quoted on Wednesday, April 12.

According to Perry, BI together with central banks of regional countries have agreed on cross-border QR Code-based payment cooperation (cross-border QR payment linkage).

On August 29, 2022, BI and BOT agreed to implement cross-border QR Code-based payment cooperation.

At the same time, it was also agreed to initiate a similar cooperation between Indonesia and Singapore. Meanwhile, BNM has launched a trial interconnection of payments between countries using the QR Code between Indonesia and Malaysia on January 27, 2022.

"Hopefully, with deepening through the Nexus Project at this stage, cross-border payment system connectivity based on fast payment as a payment system infrastructure to facilitate retail payments that can be accessed at any time can be realized to encourage cheaper, easier, safer, cross-border transactions. inclusive, and transparent," he said.

Perry added that various other benefits include access to a cross-border payment system that can reach MSMEs, facilitating remittances, including for Indonesian Migrant Workers (PMI), and facilitating transactions for tourists.

For information, the Nexus Project in its early stages is a study conducted by BIS in realizing a multilateral scheme to connect fast payment-based payment systems in various countries (Nexus Project Phase I).

Furthermore, BIS together with BNM, MAS, and Banca d'Italia conducted a study and technical trial of fast payment-based payment connectivity (Nexus Project Phase II).

Currently, BI together with BIS, BNM, BSP, MAS, and BOT will conduct studies and deepen the potential for fast payment-based payment connectivity which will include organizational and governance schemes, business models and commercial adoption, as well as technology and operations (Nexus Project Phase III). Phase III itself is planned to be carried out from April 2023 to March 2024.