Jakarta. Indonesia and Singapore are set to streamline cross-border transactions, eliminating the need for citizens to exchange currencies when making payments across the border.

Efforts have begun to implement an interconnection of payment methods using the quick response (QR) code. This initiative will allow participating financial institutions to facilitate retail payments utilizing either the Quick Response Code Indonesian Standard (QRIS) or the QR Network for Electronic Transfers Singapore (NETS).

"The interconnected cross-border QR payment method between Indonesia and Singapore will profoundly benefit our micro, small, and medium-scale enterprises. It will streamline payments in a transparent and inclusive manner," Bank Indonesia Governor Perry Warjiyo said in a statement.

He further emphasized that this agreement is anticipated to broaden market access for businesses from both countries and encourage an increase in tourist visits.

This development follows the signing of a letter of intent between the Indonesian central bank and the Monetary Authority of Singapore (MAS) for the local currency settlement framework, expected to be implemented as early as next year.

The framework aims to facilitate cross-border transactions, QR code payments, trade, and investments using the Indonesian rupiah and Singaporean dollar. Its goal is to enhance efficiency and reduce risks associated with fluctuating exchange rates.

Both Bank Indonesia and MAS are actively promoting the utilization of local currencies in bilateral transactions, aiming for greater stability, Perry said.

Ravi Menon, Managing Director of MAS, echoed Perry's sentiments, noting that the interconnected payment system will significantly boost e-commerce activities and tourist spending in both countries.