A recent press release from the Communications Department of Bank Indonesia (BI) has announced that as a form of commitment to strengthening cross-border payment system connectivity, Bank Indonesia collaborates with Bank Negara Malaysia (BNM), Bangko Sentral ng Pilipinas (BSP), Monetary Authority of Singapore (MAS), and Bank of Thailand (BOT) to jointly together to explore the potential for fast payment -based payment connectivity in the region.
The five central banks are collaborating with the Bank for International Settlements (BIS) in exploring the potential for fast payment- based payment connectivity in the region through the implementation of the Nexus Project. This cooperation is also a continuation of the Memorandum of Understanding (NK) for Regional Payment Connectivity Cooperation signed by the five central banks on November 14, 2022.
The Nexus project in its early stages is a study conducted by BIS in realizing a multilateral scheme to connect fast payment- based payment systems in various countries (Nexus Project Phase I).
Furthermore, BIS together with BNM, MAS, and Banca d’Italia conducted a study and technical trial of fast payment -based payment connectivity (Nexus Project Phase II). Currently, BI together with BIS, BNM, BSP, MAS, and BOT will conduct studies and deepen the potential for fast payment -based payment connectivity which will include organizational and governance schemes, business models and commercial adoption, as well as technology and operations (Nexus Project Phase III). Phase III itself is planned to be carried out from April 2023 to March 2024.
The Governor of BI, Perry Warjiyo said that, BI’s involvement in the Nexus Project is one of the implementations of the Regional Payments Connectivity Cooperation NK at the November 2022 G20 Summit, and one of the priority agendas of Indonesia’s Chairperson’s financial channel at ASEAN 2023.
This Nexus will be a strategic step as well as a joint effort to establish broader payment system connectivity. BI continues to be committed to realizing faster, cheaper, easier, transparent and inclusive payment system connectivity.
Previously, BI together with the central banks of regional countries had agreed on cross-border QR Code-based payment cooperation (cross-border QR payment linkage.) On August 29, 2022, BI and BOT agreed on the implementation of cross-country QR Code-based payment cooperation. At the same time, it was also agreed to initiate a similar cooperation between Indonesia and Singapore. Meanwhile, BNM has launched a trial interconnection of payments between countries using the QR Code between Indonesia and Malaysia on January 27, 2022.
It is hoped that with the deepening through the Nexus Project at this stage, cross-border payment system connectivity based on fast payment as a payment system infrastructure to facilitate retail payments that can be accessed at any time can be realized to encourage the realization of cross-border transactions that are cheaper, easier, safer, inclusive, and transparent. Various other benefits include access to a cross-border payment system that can reach MSMEs, facilitating remittances, including for Indonesian Migrant Workers (PMI), and facilitating transactions for tourists.
Source: Bank Indonesia
