THE Monetary Authority of Singapore (MAS) and Bank Indonesia have launched a new cross-border quick response (QR) payment linkage between Indonesia and Singapore on Friday (Nov 17).

Customers of participating financial institutions in both countries will now be able to make cross-border retail payments when making purchases. Specifically, they can do so by using their existing mobile banking applications to scan QRIS (Quick Response Code Indonesian Standard) or NETS QR codes in Singapore and Indonesia, said MAS.

In Singapore, OCBC and UOB have signed on for this initiative, with DBS due to join at a later stage.

In Indonesia, the participants include: Bank Central Asia, Bank CIMB Niaga, Bank Pembangunan Daerah Bali, Bank Permata, Bank Syariah Indonesia, Bank Mega, Bank Sinarmas, Bank Rakyat Indonesia, Espay Debit Indonesia Koe and Netzme Kreasi Indonesia.

“The QRIS-NETS QR payment linkage will promote cross-border e-commerce activities and tourism spending across Singapore and Indonesia, by individuals and small businesses,” said Ravi Menon, managing director of MAS.

The linkage will also allow for “faster, cheaper, more transparent, and more inclusive cross-border payments”, said Perry Warjiyo, governor of Bank Indonesia.

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The two central banks also signed a letter of intent to establish a local currency settlement framework, which will facilitate the settlement of cross-border payments, including QR payments, trade and investments between Indonesia and Singapore in their respective local currencies.

This will help businesses and other users reduce their exposure to exchange rate risks and costs, said MAS. The framework is expected to be operational in 2024.

Menon said this will complement the two countries’ payment linkage by facilitating the use of rupiah and Singapore dollar for the settlement of cross-border payments.

Jacquelyn Tan, head of group personal financial services, UOB, said she expects “strong growth” for the UOB QRIS payment service in Indonesia, based on the bank’s experience with the UOB Duitnow QR in Malaysia.

“Users have welcomed the convenience and security of the service, given that they no longer need to queue at money changers to change currencies and carry large wads of cash everywhere,” she said.

Another welcome feature is the absence of any additional administrative or foreign transaction fees charged when making payment, so customers pay only for their purchase, Tan added.

“These same benefits should endear the UOB QRIS payment service to customers and local merchants, as seen by good acceptance coverage in popular destinations frequented by Singaporeans, such as Bali and Batam.”

At the same time, MAS also launched a new real-time payment systems linkage between Singapore’s PayNow and Malaysia’s DuitNow, enabling Singapore and Malaysian users to send and receive up to S$1,000 or RM3,000 daily via one’s mobile number or virtual payment address. 

The service will be made available to Singapore customers of Liquid Group, Maybank Singapore, OCBC and UOB under a phased approach, said MAS. These institutions will progressively increase the number of eligible user groups from today until end-January 2024, it added. 

For users in Malaysia, the service will first be available to all CIMB, Maybank and TNG Digital users. Other financial institutions will be gradually onboarded thereafter, the central bank said. 

“This is such an easy way to send money to your children studying overseas in these two countries,” said Menon, who was speaking at the launch of the PayNow-DuitNow linkage at the Singapore FinTech Festival. 

The linkage between Singapore and Malaysia is also the first time non-bank financial institutions have been included, he added. 

There are also plans to add more participants as MAS works to improve access to safe, instant and low-cost remittances for the industry, Menon said. 

OCBC said it expects the new person-to-person linkage to be widely used, noting that its DuitNow QR codes launched earlier in the year have been well received, with 25 per cent more transactions month on month in October. 

“This new P2P offering goes one step further in closing the distance, allowing customers in Singapore a convenient yet safe way to send money to friends, family and business in Malaysia,” said Sunny Quek, head of global consumer financial services at OCBC.