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Indonesia: The launch of cross-border QR payment linkage

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In brief

In the spirit of the ASEAN Central Bank Governors’ Meeting in April 2022 (which is one of Indonesia’s G20 Presidency events) and Indonesia’s Payment System 2025 Visions that were introduced in May 2019, Bank Indonesia has launched cooperation with Bank of Thailand that enables consumers and merchants in both countries to make and accept instant cross-border QR payments for goods and services. QRIS (Quick Response Code Indonesian Standard) and Thai QR Codes will be used in this cooperation. Please see Bank Indonesia’s press releases here. This cooperation was formally launched on 29 August 2022, following a pilot program that started on 17 August 2021.

Highlights

For details on QRIS, please refer to our previous Client Alert.

The cooperation is aligned with the ASEAN Agreement on Electronic Commerce, which provides a set of policies, principles and rules to govern cross-border e-commerce in the ASEAN region. The facilitation and easing of cross-border payments is one of the pillars that will support the implementation of cross-border electronic trading objectives encompassed in the ASEAN agreement.

The crux of this cooperation is to allow users from Indonesia to use their mobile payment applications to scan Thai QR Codes to make payments for goods and services to merchants in Thailand. Likewise, users from Thailand can use their mobile payment applications to scan QRIS to pay merchants in Indonesia for goods and services. Currently, there are 76 payment services providers from Indonesia and Thailand that support this cooperation and there is an expectation that this number would grow. 

Bank Indonesia is planning to have similar cooperation with other countries, such as Singapore and Malaysia. For Malaysia, the cooperation is already in a pilot phase since January 2022 and it is targeted for a full commercial launch in the third quarter of 2022. For Singapore, the cooperation is targeted to be launched in the second half of 2023.

Closing

As the pandemic proves that transformation is inescapable, this cooperation of cross-border QR payment linkage will certainly enable instant, secure, and efficient cross-border payments. This is expected to be the first of many collaborations with other central banks, in anticipation of the time when cross-border travel will again be possible and to accommodate the rapid rise in e-commerce trading that spans across national borders. Hopefully, this could bring more consolations for the public in using QR payments. Yet again, Indonesia is on the move in making its payment system industry more agile in responding to globalization.

With thanks to Jonathan Edward Tobing for his assistance in preparing this alert.


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Erwandi Hendarta is a senior partner and the Head of Finance & Projects Practice Group in Hadiputranto, Hadinoto & Partners. Erwandi has extensive experience working in the business and financial sectors. Erwandi has had multiple careers, having worked as a central banker at Bank Indonesia (the Central Bank of Indonesia) handling Government’s projects with multilateral agencies (IBRD/the World Bank, OECF, ADB) and as an investment banker doing corporate finance with Schroders Indonesia (an investment banking arm of Schroders Plc., London) before becoming a lawyer with HHP. In addition to his Indonesian legal degree, Erwandi has an LL.M. from Cornell University, USA, and an MBA from Boston University, USA. He was a recipient of prestigious graduate scholarships from the Fulbright, USA and the World Bank. Erwandi has been a regular contributor to Doing Business publications by the World Bank and the IFC.
Hadiputranto, Hadinoto & Partners is a member of Baker & McKenzie International, a Swiss Verein.

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Mahardikha K. Sardjana is a partner in the Finance & Projects Practice Group of Hadiputranto, Hadinoto & Partners. He has been specializing in banking and finance matters for more than nine years. Mr. Sardjana has been leading the group's M&A projects on financial institutions for the past eight years. He has been involved in several projects relating to derivatives, commission sharing, securitization, loan syndications, mergers and acquisitions of banks and general banking and finance transactions. Mr. Sardjana has also assisted due diligence projects for acquisitions, mergers, rights issues, companies going private, bond transactions, and in the drafting of the legal due diligence reports for the transactions.
Hadiputranto, Hadinoto & Partners is a member of Baker & McKenzie International, a Swiss Verein.

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Eddie is a partner in the Finance & Projects Practice Group of Hadiputranto, Hadinoto & Partners, with a special focus on banks and financial institution. He has had a varied career as a corporate lawyer and tax advisor in different jurisdictions including Indonesia, the Netherlands and Oman. Eddie's unique career background enables him to take cross-disciplinary, commercial, insightful and strategic approaches in handling cases of banks and financial institutions. Eddie is a trusted advisor of numerous international and local banks and financial institutions. Eddie received a prestigious HSP Huygens Scholarship from the Government of the Netherlands to take an LLM Degree in International Tax Law from Leiden University, the Netherlands in 2010 and also received a Fulbright IELSP Scholarship from the US Department of State in 2008.

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Johan Kurnia is a Senior Associate in Baker McKenzie, Jakarta office.
Hadiputranto, Hadinoto & Partners is a member of Baker & McKenzie International, a Swiss Verein.

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Frendy Tanoto Yoga is an Associate in Baker McKenzie, Jakarta office.

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