Asean central banks sign payment connectivity deal

THE Bangko Sentral ng Pilipinas (BSP) and five other central banks in Southeast Asia signed the Regional Payment Connectivity (RPC) cooperation that will allow cross-border payments to become more seamless.

In a joint statement, the BSP, Bank Indonesia (BI), Bank Negara Malaysia (BNM), Monetary Authority of Singapore (MAS), and Bank of Thailand (BOT) said this is expected to benefit micro, small, and medium enterprises (MSMES).

The RPC will facilitate MSMES participation in international markets. The cooperation will include a number of modalities, including QR code and fast payment.

“The more we recognize how interdependent our economies are, the more we need to be deliberate in our pursuit of the vision of an interconnected Asean region,” Deputy Governor Mamerto E. Tangonan of the BSP, who represented BSP Governor Felipe M. Medalla, said.

“This MOU concretizes our collaborative and inclusive approach to enhancing cross-border payments in the ASEAN that will translate into efficiency gains and cost savings in various international financial transactions and economic activities,” he added.

The Asean Central Banks said the RPC is expected to be a significant contributor to accelerating regional economic recovery and promoting inclusive growth.

The implementation of crossborder 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.

The payment connectivity initiative could be expanded to include other countries in the region and potentially other partner countries outside the region.

“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,” BI Governor Perry Warjiyo said.

“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,” he added.

This 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.

This milestone marks the start of Indonesia’s chairmanship of the Association of Southeast Asian Nations (Asean) in 2023.

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, Philippines, Singapore, and Thailand.

Accelerating economic and financial digitalization has become a global initiative with the G20 establishing its Roadmap for Enhancing Cross-border Payments.