Vietnam, the Philippines, and Brunei will join other major Southeast Asian economies in an interconnected QR code payment system that aims to promote use of local currencies and reduce dependence on the US dollar.
Indonesia, Thailand, Malaysia, and Singapore are already progressing with the implementation of bilateral transactions using QR codes among one another—which was initiated last year, said Perry Warjiyo, governor of Indonesia’s central bank, on Friday.
“This commitment will help … facilitate seamless and secure cross-border payment,” Warjiyo told reporters after a meeting here between top finance officials from the Association of Southeast Asian Nations.
“Gradually … all of the countries [will be] connected in their … payments with local currencies being used,” he said.
Indonesia is currently piloting the initiative with Singapore, and the four countries “by the end of this year will be interconnected [with] each other—from bilateral to multilateral,” he said.
Under the payment scheme, the central banks of Malaysia and Indonesia launched a cross-border link in May. Malaysians traveling to Indonesia can now pay for goods and services by simply scanning QR codes with their mobile phones, as can Indonesians traveling in Malaysia. Payments are settled using local currencies, bypassing the need for US dollars as an intermediary.
Warjiyo said Vietnam is expected to soon join the initiative, with the country’s financial authority in charge of domestic payment systems currently in talks with the local industry to agree on a national QR system.
“The Philippines is consolidating its QR payment industry, with officials there persuading industry players to agree on regional interconnectivity. Brunei, meanwhile, is setting up a national regulatory framework to give its financial authorities the power to regulate and oversee domestic payment systems, a prerequisite for the next steps,” Warjiyo said.
He expressed hope that more and more ASEAN member countries will establish cooperation on local currency transactions. “This will also further promote stability in both macroeconomy [and] financial system, and to address heightened external vulnerability”, he said.
The regional payment connectivity initiative was agreed on at the ASEAN leaders summit in Labuan Bajo, Indonesia, this May. Indonesia, which holds the rotating chairmanship of the 10-member bloc in 2023, will host the year’s second ASEAN leaders summit as well as the East Asia Summit in the first week of September.