Vietnam joins Southeast Asian effort on cross-border payments

Vietnam joins Southeast Asian effort on cross-border payments
People go past the State Bank building, near the offices of Vietcombank and the Bank for Investment and Development of Vietnam, in central Hanoi, Vietnam. (File photo: Reuters/Kham)

JAKARTA: Vietnam’s central bank signed an agreement on Friday (Aug 25) to be part of an initiative by five other Southeast Asian countries to establish a cross-border payments mechanisms between them.

Vietnam will join Indonesia, Malaysia, Thailand, the Philippines and Singapore in working to connect each of their payment systems, including using the QR (quick response) code system for retail transactions.

The agreement was made at a meeting of the 10-member Association of Southeast Asian Nations (ASEAN) finance ministers and central bank governors in Jakarta.

Furthermore, Indonesia, Malaysia and Thailand have agreed to later facilitate cross-border transactions for financial assets like equities and government bonds in local currencies.

“We are not only facilitating trade and investment, but also our resiliency toward global uncertainty of the exchange rate, of the Fed,” Bank Indonesia governor Perry Warjiyo told a press conference.

Indonesia has already connected its payment system using QR codes with Thailand and Malaysia and is aiming to link up with Singapore later this year.

ASEAN, a bloc of more than 600 million people, has faced years of delays in its efforts to integrate its economies, worth a combined US$2.3 trillion, through trade, investment and market connectivity and harmonised standards and customs procedures.

Source: Reuters