During the ASEAN Finance Ministers and Central Bank Governors Meeting (AFMGM) held in Bali last March, ASEAN Members States pledged to rapidly expand Regional Payment Connectivity. As a follow up, the ASEAN Business Advisory Council (ASEAN-BAC) Chairman, Arsjad Rasjid shared that the ASEAN QR code digital payment system will be officially launched across all ASEAN, including Brunei and Myanmar, by September 2023. The ASEAN QR code system will enable cross-border payments using local currencies and reduce transaction costs by 30%. If ASEAN continues to improve digital finance literacy, MSMEs could emerge as winners from this regional payment connectivity.
The ASEAN QR Code scheme is still in its early stages, with limited data available on the number or value of transactions. The linkage between ASEAN 5 alone (Indonesia, Malaysia, and Thailand, with Singapore and, partially, the Philippines) makes up around 85% of Southeast Asia’s economy, mainly made through commerce and travel. While digital wallets are still its favored method for non-cash payments, Indonesia is leading QR adoption in the region, having tripled nearly every year since being launched in 2019.
The momentum for developing a cross-border QR payment in ASEAN accelerated during the pandemic. After a set of pilot programs, the ASEAN-5 signed an agreement in 2022, allowing free digital cross-border transactions based on local currency settlement at better conversion rates compared to traditional platforms. This is one of the biggest de-dollarization initiatives along with the BRICS (Brazil, Russia, India, China and South Africa) efforts to reduce using US dollars.
