The fast payment connectivity is a continuation of an MoU on Regional Payment Connectivity signed by the five central banks on November 14, 2022.
Heaptalk, Jakarta — Bank Indonesia (BI) announced a partnership with four central banks in ASEAN to explore the potential for fast payment connectivity (04/11). The four central banks are Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), the Monetary Authority of Singapore (MAS), and the Bank of Thailand (BOT).
To assess this potential, Bank Indonesia and the four central banks are partnering with the Bank for International Settlements (BIS) through the Nexus Project. This collaboration is a continuation of a memorandum of understanding on Regional Payment Connectivity signed by the five central banks at the G20 Summit on November 14, 2022.
In more detail, Project Nexus is divided into three phases. The early stage or the Phase I Nexus Project is a study conducted by BIS in realizing a multilateral scheme to connect the systems in multiple countries. Further, BIS together with BNM, MAS, and Banca d’Italia conducts a study and technical trial of fast payment connectivity, which is called Phase II Nexus Project.
Currently, BI together with BIS, BNM, BSP, MAS, and BOT are conducting studies and deepen the potential for fast payment connectivity which include organizational and governance schemes, business models, and commercial adoption, as well as technology and operations, referred to as the Project Nexus Phase III. This stage is planned to be carried out from April 2023 to March 2024.
The Governor of BI, Perry Warjiyo said that BI’s involvement in the Nexus Project is one of the implementations of the Regional Payments Connectivity Cooperation MoU at G20 Summit, and one of the priority agendas in the financial channel for Indonesia’s Chairmanship in ASEAN 2023.
“The stages of the Nexus Project will be a strategic step as well as a joint effort to establish wider payment system connectivity. BI continues to be committed to realizing payment system connectivity that is faster, cheaper, easier, transparent, and inclusive,” Perry said in a written statement.
Cross-border QR code payment agreements
Previously, BI and the central banks of regional countries have signed an agreement on cross-border QR payment linkage. On August 29, 2022, BI and BOT have permitted the implementation of this collaboration.
Simultaneously, Indonesia also agreed to initiate a similar collaboration with Singapore. In addition, BI also partnered with BNM to launch a trial interconnection of payments using the QR code in Indonesia and Malaysia on January 27, 2022.
The various benefits of this fast payment cross-border connectivity cover access to reach MSMEs, facilitating remittances one of which is for Indonesian migrant workers, and simplifying transactions for tourists. With the deepening of the Nexus Project at this stage, fast payment cross-border connectivity can be realized to encourage cross-border transactions that are cheaper, easier, safer, inclusive, and transparent.
