In a major fillip to economic activities in the Association of Southeast Nations (ASEAN), Bank Negara Malaysia (BNM) and Bank Indonesia (BI) have jointly announced the commercial launch of the Indonesia-Malaysia cross-border quick response (QR) code payment linkage as the two countries took a major step forward in integrating digital transaction systems.
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The launch ceremony was held as part of the annual Digital Economy and Finance Festival Indonesia (FEKDI) in Jakarta, Bank Indonesia (BI) Governor Perry Warjiyo and Coordinating Economic Minister Airlangga Hartarto were among those present.
Indonesian President Joko Widodo, who took part in the event virtually, said: “I hope the cross-border QRIS (payments) and the Credit Card Indonesia (KKI) (initiative) can push transactions by micro, small and medium enterprises (MSMEs), be they through domestic spending or expanding access to international markets.”
Widodo also advocated for a wide adoption of the KKI credit cards, which were launched on the same day. These cards, used by government officials, are aimed to improve traceability and provide greater accountability in state spending.
Indonesia has concluded the same arrangement with Thailand and is looking to similar deals with Singapore and the Philippines. BI opened the possibility of further expanding the cooperation to Vietnam, Cambodia, Brunei, and Laos in March this year.
The government is looking to reach 45 million QRIS users and 1 billion transactions while the total value of these transactions in Indonesia has so far been 135 million.
The linkage enables Indonesians and Malaysians to make instant retail payments in both countries by scanning the Quick Response Code Indonesian Standard (QRIS) or DuitNow. The linkage was launched after months of testing and completion of the pilot phase of the linkage announced on 27 January 2022, the central banks said in a joint statement on Monday.
It is also in alignment with the G20 Roadmap for enhancing cross-border payments and serves as a deliverable of Indonesia’s chairmanship of the ASEAN in 2023, while representing a milestone of the Indonesian Payment System Blueprint 2025.
The announcement further highlighted that the QR payment linkage is set to strengthen the economic ties between Indonesia and Malaysia, supporting an increasingly inclusive and strong post-pandemic economic recovery.
Boost Economic Activities
BNM governor Tan Sri Nor Shamsiah Mohd Yunus said the linkage offers significant potential to boost economic activities, including tourism spending in the two countries. The payment linkage will also help expand markets for some businesses, and facilitate increased settlements in local currency, thereby improving financial outcomes.
“ASEAN is more connected now than ever. Many more users from Malaysia and Indonesia will benefit from a secure, more seamless, and more efficient experience to make and receive cross-border payments,” she said.
The launch of the payment linkage is a result of close industry collaboration championed by BI and BNM, working closely with the Indonesian Payment System Association (including its member payment system operators in Indonesia), PayNet, and participating financial institutions.