Five central banks sign regional payment connectivity cooperation

• To strengthen and enhance cooperation on payment connectivity
• Significant contributor to accelerating regional economic recovery

Five regional central banks have signed a memorendum of understanding (MoU) on cooperation in regional payment connectivity (RPC) to strengthen and enhance cooperation on payment connectivity to support faster, cheaper, more transparent, and more inclusive cross-border payments.

In a statement, Bank Negara Malaysia said the banks are: Bank Indonesia (BI), Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Bank of Thailand (BOT).

The regional payment connectivity was signed on Nov 14 in Bali, Indonesia on the sidelines of the G20 Leaders’ Summit with keynote address from Indonesia’s President Joko Widodo.

Widodo expressed his highest appreciation to the Governors of the five central banks for their commitment to delivering innovative breakthroughs that will further accelerate regional payment connectivity.

The RPC is expected to be a significant contributor to accelerating regional economic recovery and promoting inclusive growth.

The implementation of cross-border payment connectivity serves to support and facilitate cross- border trade, investment, financial deepening, remittance, tourism, and other, BNM said.
 
The cooperation initiative is also in line with Indonesia’s G20 Presidency priority agenda in the area of digital transformation, including through payment systems in the digital era, manifested by the joint efforts to pursue enhanced cross-border payment connectivity involving Indonesia, Malaysia, Philippines, Singapore, and Thailand, it added.

Going forward, this payment connectivity initiative could be expanded to include other countries in the region and potentially other partner countries outside the region, BNM said.

BI governor Perry Warjiyo said, “This MOU serves as a significant milestone in paving the road for advancing cross-border payment connectivity. Existing bilateral payment connectivity arrangements will be expanded as part of the region’s efforts to strengthen its economic integration.

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

Nor Shamsiah Yunus, the governor of BNM said, “The initiative underscores 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.”

Ravi Menon, managing director of MAS said, “This MOU underscores Asean’s commitment to achieve regional payments interoperability and connectivity by 2025 to enable cheaper, faster, and more transparent cross- border payments."

Deputy Governor Mamerto Tangonan of the BSP, who represented BSP Governor Felipe M. Medalla, added, This MOU concretises 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.”

Deputy Governor Ronadol Numnonda of the BOT, who represented BOT Governor Sethaput Suthiwartnarueput, noted, “Building on our previous efforts, this MOU marks another milestone in our Asean Payment Connectivity initiative in working together to address the long- standing pain points in cross-border payments.