Post by : Anis Farhan

A unified payment vision

ASEAN has embarked on an ambitious journey to unify digital payments across the region. The ASEAN Integrated QR Code Payment System, launched in 2023 under the Local Currency Transaction (LCT) Framework, aims to connect national QR systems so users can pay across borders directly in their own currency. This marks a major step away from dollar-dependent financial setups, laying the groundwork for seamless regional travel, tourism, trade, and digital.

How integration began

The effort kicked off at the 10th ASEAN Finance Ministers’ and Central Bank Governors’ Meeting in Jakarta on August 25, 2023, which formalized the integration plan. The initiative initially linked QRIS (Indonesia), DuitNow QR (Malaysia), PromptPay (Thailand), and SGQR+ (Singapore). Cambodia, Laos, Vietnam, Myanmar, and the Philippines are following in phased rollouts. Key bilateral linkages—Indonesia-Thailand (2021), Indonesia-Malaysia (2022–23), and Indonesia-Singapore (2023 FinTech Festival)—paved the way.

Project Nexus launches

To avoid a tangled web of bilateral links, ASEAN backs Project Nexus, led by the Bank for International Settlements (BIS). Nexus proposes a hub-and-spoke platform to connect all domestic instant payment systems. Founding members—including Malaysia, Singapore, Thailand, Indonesia, the Philippines, and India—are testing it, with official rollouts expected by 2026–27.

Core mechanics explained

When scanning a QR code abroad, your mobile wallet automatically converts your currency—be it baht, ringgit, rupiah, or dong—settling locally without using USD as a middleman. This fosters lower fees, transparent conversions, and improved economic sovereignty. Furthermore, tourists avoid cash exchange hassles, and small businesses can capture cross-border sales effortlessly.

Driving financial inclusion

A 2022 Visa study showed 82 percent smartphone usage in Southeast Asia, yet only 38 percent training using QR payments. For MSMEs and rural vendors, QR systems offer a low-cost, accessible path to digital commerce—no need for POS machines. Use statistics support this: Vietnam processed 1.29 billion QR transactions in 2023; Malaysia recorded over 2 billion in three years; Singapore logged 125 million in 2020.

Expansion of national systems

Each country launched its unified QR standard first. QRIS (Indonesia), PromptPay (Thailand), DuitNow (Malaysia), SGQR (Singapore), VietQR (Vietnam), KHQR (Cambodia), LAO QR (Laos), MMQR (Myanmar), and QR Ph (Philippines) are now operational. Myanmar’s MMQR debuted in February 2025.

Notable milestones

• Indonesia–Thailand QR linkage launched October 2022, enabling users from both nations to pay via each other's QR systems.

• Indonesia–Singapore connection made official in November 2023 for one million travelers.

• Malaysia and Cambodia integrated in April 2025; further linkages to India and the Philippines are planned by year’s end.

Key benefits unfolding

• Ease of transactions: Tourists and expatriates avoid currency exchanges or carrying cash.

• Lower fees, thanks to local currency use and reduced intermediary costs.

• Inclusive commerce: MSMEs engage in cross-border trade cost-effectively.

• Economic resilience, reducing dependence on USD, aligning with ASEAN digital sovereignty goals.

Challenges to address

Despite momentum, obstacles remain. National regulations differ on data privacy, fraud protection, and cybersecurity. Rural infrastructure gaps could limit access, while merchant readiness varies. Currency imbalances—especially involving strong SGD—may prompt inflation concerns. Also, multiple bilateral links risk complexity without a common hub.

Next steps to watch

• Project Nexus rollout, expected live in pilot stage by 2026.

• Regulatory harmonization across ASEAN nations to ensure standard security and consumer protections.

• Expansion of connectivity to Japan and India via systems such as JPQR and UPI—already interoperable with PayNow in Singapore since 2023.

• Merchant training programs and awareness campaigns to boost adoption.

Disclaimer:

This article has been prepared by Newsible Asia purely for informational and editorial purposes. The information is based on publicly available sources as of June 2025 and does not constitute financial, medical, or professional advice.