Indonesia and Thailand Implement QR Payment Linkage

Indonesia’s central bank (Bank Indonesia) and Thailand’s central bank (Bank of Thailand) have implemented a cross-border QR payment linkage between the two countries after holding successful trials last year.

The new system allows Indonesian consumers to pay for goods or services in Thailand by scanning Thai QR codes. As well, Thai consumers can use their mobile applications to scan the Quick Response Code Indonesian Standard (QRIS) when buying products or services in Indonesia. There are some 76 payment service providers from both countries that have joined this project, and this is expected to grow.

Bank Indonesia is exploring other QR payment linkages with Singapore and Malaysia. For Singapore, the cooperation is targeted for launch in 2023, whereas for Malaysia, the cooperation has been in a pilot phase since January 2022 and is expected to be operational by the end of 2022.

The ASEAN Agreement on Economic Commerce

The cross-border QR payment initiatives are in line with the ASEAN Agreement on Economic Commerce, which provides a set of rules to govern cross-border e-commerce in the Southeast Asian bloc in addition to paving the way towards a regionally integrated digital economy. An important pillar of the agreement is the facilitation and easing of cross-border payments.

E-commerce grew exponentially in Southeast Asia amid the COVID-19 pandemic and the region is on track to have an internet economy with a gross merchandise value of US$350 billion by 2025, which will grow to US$1 trillion by 2030. This will mainly be driven by e-commerce, online food delivery, and a growing base of digital consumers and merchants.

How QR payments can strengthen Southeast Asia’s MSMEs

QR codes can encourage Southeast Asia’s micro, small, and medium-sized enterprises (MSMEs) to adopt cashless payment options, particularly since most MSMEs are in the informal sector and are either unbanked or underbanked. An estimated 50 percent (approx. 300 million people) of the region’s population are unbanked and a further 24 percent are estimated to be underbanked.

Financial inclusion varies among Southeast Asian countries. Singapore is one of the most financially inclusive countries in the world whereas some 70 percent of Vietnam’s population is unbanked. For the Philippines its 65 percent, and for Indonesia, it is 50 percent.