Mon, 16 May 2022

KUALA LUMPUR, Jan. 27 (Xinhua) -- The central bank of Malaysia and Indonesia on Thursday launched a cross-border QR payment linkage to enable instant, secure and efficient cross-border payments between the two countries.

Bank Negara Malaysia (BNM) and Bank Indonesia (BI) said in a statement that through this linkage, consumers in both countries will be able to make retail payments by scanning the DuitNow or Quick Response Code Indonesian Standard QR codes displayed by offline and online merchants.

The launch marks the beginning of a pilot phase that will pave the way for a full commercial launch in the third quarter of 2022, said the banks.

This linkage will be expanded in the future to support cross-border remittance where users in both countries can make real-time fund transfers with convenience, they added.

BNM Deputy Governor Jessica Chew Cheng Lian said the cross-border QR payment linkage between Malaysia and Indonesia marks a key milestone in the long history of collaboration between both countries.

"Phase two of the QR payment linkage between Malaysia and Thailand has also gone live this week. Such developments will bring us closer towards realizing the vision of creating an ASEAN network of fast and efficient retail payment systems. This, in turn, will further accelerate our digital transformation and financial integration for the benefit of individuals and businesses," she said.

Meanwhile, Bank Indonesia Deputy Governor Doni P. Joewono said this initiative links cross-border payments through the interconnection of national QR codes of the two countries and also represents another milestone of the Indonesian payment system blueprint 2025.

"Bank Indonesia recognizes the significance of cross-border payment system linkages and has continuously pursued such initiatives. This will give more options for users in the cross-border payment space and serve as a key to improve transaction efficiency, support the digitalization of trade and investment, and maintain macroeconomic stability by promoting a more extensive use of Local Currency Settlement (LCS) Framework," he said.

Through the use of direct quotation of local currency exchange rates provided by appointed cross currency dealer banks under the LCS Framework, he said it will improve the efficiency of transactions, thus lowering the transaction cost.

According to the statement, the payment connectivity will further strengthen the close economic ties between Malaysia and Indonesia and support post-pandemic economic recovery.

As international travel resumes, the central banks said tourism will be a key sector that will greatly benefit from this service.

They noted the sizeable traveler flows between the two countries recorded an average of 5.6 million arrivals yearly before the pandemic.

Both countries are also key remittance corridors for their nationals working abroad who will benefit from faster, cheaper, and more transparent cross-border remittances, they said.

According to them, this initiative is also aligned with the Group of Twenty roadmap for enhancing cross-border payments developed by the financial stability board and other international bodies.

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