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Why expanding ASEAN payment connectivity matters
Increasing regional payment connectivity of participants can facilitate trade, investment, financial market deepening, remittances, tourism and other cross-border economic activities.
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(Left to right) Ronadol Numnonda, deputy governor of the Bank of Thailand; Ravi Menon, managing director of the Monetary Authority of Singapore (MAS); Bank Indonesia (BI) Governor Perry Warjiyo; Nor Shamsiah Mohd Yunus, governor of the Central Bank of Malaysia; and Mamerto E. Tangonan, deputy governor of the Bangko Sentral ng Pilipinas sit during the signing of a memorandum of understanding (MOU) on Cooperation in Regional Payment Connectivity (RPC) on Nov. 14, 2022, in Bali. (Bank Indonesia/PR Team)
During the 42nd ASEAN Summit in Labuan Bajo last May, ASEAN leaders said they looked forward to the expansion of the memorandum of understanding (MoU) on Cooperation in Regional Payment Connectivity (RPC) with other ASEAN countries, believing that the RPC 's inclusiveness is critical in promoting the region’s recovery.
The MoU on Cooperation in RPC was signed by five central banks of the ASEAN-5 countries, namely Indonesia, Malaysia, Singapore, Thailand and the Philippines, on the sidelines of Group of 20 summit in Bali in November 2022. The agreement seeks to strengthen and enhance cooperation on payment connectivity to support faster, cheaper, more transparent and more inclusive cross-border payments.
The expansion of the Memorandum of Understanding (MoU) on Cooperation in Regional Payment Connectivity (RPC) is essential, not only for the ASEAN region but also for Indonesia. RPC's inclusiveness to reach all ASEAN member countries can open opportunities for the region to strengthen its economy. In addition, Indonesia, as the initiator of the RPC, will potentially take advantage of the initiative's expansion.
Why is the opportunity to expand RPC MoU participation important for ASEAN? Expanding the MoU on RPC participants can open opportunities for all member states to acquire at least three mutual benefits from fast, seamless and more affordable cross-border payments in the region.
First, the expansion of the MoU will potentially accelerate economic recovery and support more inclusive economic growth in Southeast Asia.
Second, increasing RPC participants can facilitate trade, investment, financial market deepening, remittances, tourism, and other cross-border economic activities and encourage a more inclusive regional economic and financial ecosystem.
Third, the more member countries join RPC, the more penetration and exposure opportunities for micro, small, and medium enterprises (MSMEs) in the Southeast Asian market.
