Technological advancements over the recent years have been proven to make life easier for people in making payment transactions as this offers flexibility for them.
Through the newest advances in technology, transactions can now be made wherever the customers are, without the need to carry cash in their wallets.
Among such advancements is the Quick Response Code Indonesian Standard or QRIS, which is a digital payment standard that employs QR codes to facilitate cashless transactions. With QRIS, customers can effortlessly make payments by simply scanning the QR code displayed by a business.
Cross-border advancements
According to Nurul Ardhaninggar, digital manager of government investment at the Ministry of Finance of the Republic of Indonesia, the ease of the current payment system is in line with the globalisation era which makes the world seem borderless. Therefore, the economic integration that occurs as a result of globalisation makes it important to implement cross-border payments immediately.
"Cross-border payments allow for faster and cheaper payments to be made between countries," she said. "However, its implementation faces various challenges such as domestic governance, infrastructure gaps in different countries, and the high costs."
"These high costs have two negative effects, as stated in the writing of European Central Bank economist, Fabio Panetta, on October 31, 2023. First, many small and medium businesses find it difficult to expand their business across borders because of operational costs. Second, the world’s most vulnerable populations pay disproportionately more than others, for example migrant workers can face exorbitant costs when sending money home."
As of November 2023, three ASEAN countries have officially used QRIS as a payment system, according to Ardhaninggar. These countries are Thailand, which officially uses QRIS as of August 2022; Malaysia, which started in May this year; and Singapore, which commenced usage in November.
The Philippines which has signed the MoU for cross-border payments will be the target for expanding the use of QRIS afterwards, according to Ardhaninggar, and Indonesia will also encourage five other Asian countries, including Myanmar, Vietnam, Brunei Darussalam, Cambodia, and Laos, to collaborate on this payment system.
"Through this collaboration, ASEAN countries will not only encourage financial integration, but also push the region closer to a unified digital payments ecosystem, which can further increase trade, tourism, and economic growth in the long term," Ardhaninggar said, "In the future, QRIS cross-border system is expected to be implemented and expanded beyond ASEAN."
On the other hand, it should be noted that the massive implementation of cross-border QR in many countries will face several challenges. These include the gap in digital development between countries that will raise concerns regarding data privacy and cyber security, as well as the low level of financial inclusion and financial literacy in several countries that will disrupt the adoption process of this digital payment system.
