Malaysia, 4 Asean central banks enhance regional payment connectivity

MALAYSIA and four other Asean central banks are paving the way for faster and cheaper cross-border payments.

Bank Negara Malaysia (BNM) and the central banks of Indonesia, the Philippines, Singapore and Thailand have agreed to strengthen and enhance cooperation on payment connectivity to support faster, cheaper, more transparent and more inclusive cross-border payments.

They include Bank Indonesia (BI), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS) and Bank of Thailand (BoT).

A memorandum of understanding (MoU) on cooperation in regional payment connectivity (RPC) was signed today in Bali, Indonesia, on the sidelines of the G20 Leaders’ Summit, BNM said in a statement.

In his remarks at the signing ceremony, Indonesia’s president Joko Widodo emphasised the importance of concrete joint collaborative action in addressing global challenges.

The RPC is expected to be a significant contributor to accelerating regional economic recovery and promoting inclusive growth, the statement added.

The implementation of cross-border payment connectivity serves to support and facilitate cross-border trade, investment, financial deepening, remittance, tourism and other economic activities, as well as a more inclusive financial ecosystem in the region. This is particularly beneficial for micro, small and medium enterprises as it will facilitate their participation in international markets. The cooperation will include a number of modalities, including QR code and fast payment, it said.

BI governor Perry Warjiyo (picture) underscored that “This MoU serves as a significant milestone in paving the road for advancing cross-border payment connectivity”.

“Existing bilateral payment connectivity arrangements will be expanded as part of the region’s efforts to strengthen its economic integration. Such collaboration among central banks is key to accelerating economic recovery. We hope that other countries will follow this good example and leadership in implementing cross-border payment connectivity,” said Perry in the statement.

BNM governor Tan Sri Nor Shamsiah Yunus said the initiative underscores the importance of central bank collaboration in supporting the development of next-generation payment connectivity.

The statement added that accelerating economic and financial digitalisation has become a global initiative with the G20 establishing its Roadmap for Enhancing Cross-border Payments.

The cooperation initiative is also in line with Indonesia’s G20 Presidency priority agenda in the area of digital transformation, including through payment systems in the digital era, manifested by the joint efforts to pursue enhanced cross-border payment connectivity involving Indonesia, Malaysia, the Philippines, Singapore and Thailand.

Going forward, it said the payment connectivity initiative could be expanded to include other countries in the region and potentially other partner countries outside the region.

The joint collaboration also supports Asean’s shared aspiration for connected payment systems that will enable fast, seamless and more affordable cross-border payments across the region.

In line with Asean’s pragmatic approach to deepen integration through mutually beneficial arrangements based on the level of readiness, this initiative provides the building blocks for wider Asean participation in the near future, thereby fostering stronger regional economic ties. — TMR / pic Bloomberg