Regional Payment Connectivity Must Not Stop at ASEAN-5: Indonesia
Jakarta. ASEAN chair Indonesia is pushing for regional payment connectivity across all of the bloc’s member states in a bid to drive up economic recovery.
Last November, the central banks of five ASEAN member states signed a pact on regional payment connectivity. The five countries in question were the ASEAN-5, namely Indonesia, Malaysia, The Philippines, Singapore, and Thailand. But the bloc’s chair Indonesia wants to expand this cooperation to also include other countries of the 10-member grouping.
“We need to advance further the regional payment connectivity,” Indonesian central bank governor Perry Warjiyo said at an ASEAN high-level seminar in Bali on Tuesday.
Perry said the deal that ASEAN-5 inked last November encompassed cross-border payment, instant payment, and local currency transactions, among others. Other aspects of the partnership include real-time gross settlement (RTGS).
"Fellow ASEAN member states, we invite you to join the regional payment connectivity. Not only [limited to] an ASEAN cross-border payment system integration, but also [cooperation on] how we can advance it to support economic recovery, financial inclusion, and our global hub," Perry said.
The Bank for International Settlements (BIS) just recently announced the success of the Nexus project — a multilateral network that connects multiple instant payment systems. The Nexus successfully linked Eurosystem, Malaysia, and Singapore’s payment systems. The trial tests involved the central banks in Italy and the said two ASEAN countries. The linkage enables payments to be sent across the three jurisdictions just by using mobile phone numbers.
The next phase of the Nexus will try to link the ASEAN-5 payment systems.
Commenting on the Nexus project, Perry said “[this can grow] from the ASEAN-5 to the entire ASEAN bloc, and into the global cross-border [payment] connectivity. ASEAN will lead the way and set an example.”
Last year, ASEAN-5’s economy grew 5.3 percent — one of the highest growth globally, according to Perry. Growth in the ASEAN-5 is forecast to stand at between 4.6 percent and 4.7 percent this year and then is expected to rise by 5.6 percent in 2024.
“ASEAN is the epicenter of growth,” Perry said.