The central banks of five ASEAN member-states inked an agreement to strengthen and enhance cooperation on payment connectivity to support faster, cheaper, and more transparent border payments.

The Bangko Sentral ng Pilipinas announced said the central banks of Indonesia, Malaysia, Singapore, and Thailand signed a memorandum of understanding on Cooperation in Regional Payment Connectivity in Bali, Indonesia, at the sidelines of the G20 Leaders' Summit.

The RPC is expected to accelerate regional economic recovery and promote inclusive growth significantly.

"The implementation of cross-border payment connectivity (supports and facilitates) cross-border trade, investment, financial deepening, remittance, tourism, and other economic activities, as well as a more inclusive financial ecosystem in the region," BSP explained.

"This is particularly beneficial for micro, small and medium enterprises as it will facilitate their participation in international markets. The cooperation will include (several) modalities, including QR code and fast payment," BSP added.

ASEAN countries to work on improving payment connections

Indonesia, Malaysia, the Philippines, Singapore and Thailand are working to improve cross-border payment connections. The central banks could expand this payment connectivity program to include other countries in and outside the region.

This collaboration supports ASEAN's shared goal of integrated payment systems that enable fast, smooth, and economic cross-border payments. In addition, the program builds on ASEAN's pragmatic approach to expand integration through mutually beneficial arrangements based on preparedness, forging deeper regional economic linkages.

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

"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," added Mamerto.

For his part, Bank Indonesia Governor Perry Warjiyo underscored that the MoU is a significant milestone in paving the road for advancing cross-border payment connectivity.

"Such collaboration among central banks is key to accelerating economic recovery. We hope other countries will follow this good example and leadership in implementing cross-border payment connectivity," Warjiyo said.