BNM, Four ASEAN Central Banks Sign Agreement To Advance Cross-Border Payment Connectivity
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Bank Negara Malaysia (BNM) has signed a memorandum of understanding (MoU) with the central banks of Indonesia, the Philippines, Singapore, and Thailand to further advance their cooperation in regional payment connectivity (RPC). The agreement is expected to bring about faster, cheaper, more transparent, and more inclusive cross-border payment processes between the five countries.

In a joint statement, BNM said that the cooperation – which will include several modalities, including QR code and fast payments – seeks to help accelerate regional economic recovery and promote inclusive growth. It will support and facilitate economic activities such as cross-border trade, investment, remittance, tourism, and financial deepening, as well as introduce a more inclusive financial ecosystem in the region.

In particular, micro, small, and medium enterprises (SMEs and MSMEs) are expected to benefit from the RCP cooperation as they will enjoy more opportunities to participate in international markets, said BNM.

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(Image: The Malaysian Reserve)

Additionally, BNM noted that this initiative could be expanded in the future beyond just the existing participants to include other ASEAN countries, especially since it supports ASEAN’s shared aspiration for connected payment systems that will enable seamless and affordable cross-border payments across the region. In fact, it may even consider other partner countries outside the region.

BNM governor, Tan Sri Nor Shamsiah stated that this initiative highlights the importance of central bank collaboration in supporting the development of next-generation payment connectivity. “Realising the vision of an ASEAN regional network of fast and efficient cross-border payment systems will advance our digital ambitions and further deepen financial integration for the benefit of the region’s economic development,” she further said at the signing ceremony.

(Image: Bank Negara Malaysia)

Representatives of the other central banks also share similar sentiments, noting as well that this MOU is a significant milestone in paving the road for further advancements, and in addressing any long-standing pain points in cross-border payments.

This initiative is the latest in a long line of endeavours by BNM to advance Malaysia’s cross-border payment services, which has been deemed to be crucial as Malaysia is a small and highly open economy. To date, Malaysia has successfully enabled cross-border QR payments with Thailand and Indonesia, with similar efforts made to connect with Singapore and the Philippines as well. Beyond the ASEAN region, BNM also participated in international level projects, such as Project Nexus and Project Dunbar.

(Source: BNM)

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