The Central Bank of Thailand, together with those of four other Southeast Asian countries, recently announced to have reached an agreement to connect their payment systems by November 2022, aiming at making transactions easier for travelers within the region.
This development will connect two existing payment systems. One of these currently link Malaysia, Indonesia and Thailand, while the other connects Singapore and Thailand.
The new agreement will thus connect all these five counties, allowing for local currency settlements, and bypass the need to use the US dollar as an intermediary currency. Thailand and Singapore enabled cross-border QR payments in 2019, as an arrangement between Singapore-based fintech start-up Liquid Group and Thailand’s Siam Commercial Bank. This first initiative allowed tourists from Thailand to pay in Singapore using their own Thai QR payment apps.
The five central banks intend to expand their network to other regional clusters around the world, possibly allowing for real-time bank transfers and the use of central bank digital currencies.
Bank Indonesia has acknowledged an opportunity to expand existing bilateral cooperation for payment connectivity in the region as part of the efforts to strengthen economic integration.
(Sources: Vulcan Post; NFCW)