Cross-border payments become more accessible as Singapore establishes payment linkages with Malaysia and Indonesia.
The Monetary Authority of Singapore (MAS) has recently made strides towards simplifying cross-border QR code payments in Indonesia and Malaysia.
For Singaporeans with a PayNow account with UOB, OCBC, Maybank and Liquid Group, they can make person-to-person transfers to merchants in Malaysia using mobile numbers and virtual payment addresses, transferring up to S$1,000 or RM3,000 daily. DBS and Hong Leong Bank will be joining at a later date.
The purpose of this system is to enhance various aspects of cross-border payments, focusing on cost, speed, access, and transparency. With S$2.3 billion transacted in 2022 between Singapore and Malaysia, these improvements are likely to impact a significant number of people.
Payments to Indonesia work slightly differently.
Singaporean OCBC and UOB customers can make cross-border retail payments with Indonesian merchants by scanning the QRIS (Quick Response Code Indonesian Standard) displayed by merchants in Indonesia. DBS will be joining at a later date.
This linkage is expected to promote greater integration of the digital economy and financial ecosystem between Singapore and Indonesia, particularly benefiting retail customers, and micro and small businesses.
Furthermore, a local currency settlement framework is anticipated to be established by 2024, aiming to facilitate cross-border payments using local currencies and reduce businesses’ exposure to exchange rate risks.
With these QR quote payment systems, travellers from Singapore can now have more payment convenience while visiting Indonesia. It is recorded that in the first half of 2023, 600,000 people travelled from Singapore to Indonesia, while 1.1 million people from Indonesia visited Singapore.
The rise of local currency settlement frameworks, along with the increasing interest in cryptocurrency and artificial intelligence in mitigating fraud, point towards a horizon of exciting opportunities and developments for Singapore.
