SE Asian central banks ink payment deal

FIVE Southeast Asian central banks have agreed to strengthen payment connectivity cooperation in bid to improve crossborder transactions.

A memorandum of understanding (MoU) was signed on Monday by the Bangko Sentral ng Pilipinas (BSP), Bank Indonesia (BI), Bank Negara Malaysia (BNM), the Monetary Authority of Singapore (MAS) and Bank of Thailand (BOT) at the sidelines of this week’s G20 Leaders’ Summit in Bali, Indonesia.

“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,” the central banks said in a joint statement.

Micro, small and medium enterprises are particularly expected to benefit as enhanced cooperation, which will include QR code and fast payments systems, among others, will facilitate their participation in global markets.

“Going forward, this payment connectivity initiative could be expanded to include other countries in the region and potentially other partner countries outside the region,” the central banks said.

BSP Deputy Governor Mamerto Tangonan, who represented BSP Governor Felipe Medalla, said, “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.

“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.

Speaking at the signing ceremony, Indonesian President Joko Widodo highlighted the importance of concrete collaborative action in addressing global challenges.

Indonesia is hosting the G20 Summit as outgoing president. The deal was also described as a milestone marking the start of Indonesia’s chairmanship of the Association of Southeast Asian Nations (Asean) next year.

“Accelerating economic and financial digitalization has become a global initiative with the G20 establishing its Roadmap for Enhancing Cross Border Payments,” the statement read. It also noted that the 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.”

“This MoU serves as a significant milestone in paving the road for advancing cross-border payment connectivity,” BI Governor Perry Warjiyo said.

Ravi Menon, MAS managing director, said the deal “underscores Asean’s commitment to achieve regional payments interoperability and connectivity by 2025 to enable cheaper, faster and more transparent cross-border payments.

BNM Governor Nor Shamsiah Yunus, for his part, said that “realizing the vision of an Asean regional network of fast and efficient cross-border payment systems will advance our digital ambitions and further deepen financial integration for the benefit of the region’s economic development.”

Deputy Governor Ronadol Numnonda of the BOT, who stood in for BOT Governor Sethaput Suthiwartnarueput, said: “Building on our previous efforts, this MoU marks another milestone in our Asean Payment Connectivity initiative in working together to address the long-standing pain points in cross-border payments.”