## SOUTHEAST ASIA’S CROSS-BORDER PAYMENT PUSH

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**Canonical URL:** [SOUTHEAST ASIA’S CROSS-BORDER PAYMENT PUSH](https://www.imf.org/-/media/files/publications/fandd/article/2025/09/freischlad.pdf)

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### Case context and central problem
- Street vendor sale example: a $2 pair of sunglasses paid via a mobile wallet scanning a QR code; no cash changes hands.
- Domestic QR payments are widespread across Southeast Asia but remain largely limited to domestic use.
- QRIS (Indonesia’s national QR code standard), established in 2019, does not charge small businesses for processing payments below 500,000 rupiah ($30). Settlement is instant. Transactions above this threshold cost just 0.3 percent.
- With a mobile wallet from outside Indonesia, the sunglasses payment probably wouldn’t have gone through.

### Mobile payment innovation
- Smartphone adoption soared after 2010, fueling digital platforms for rides, meals, and e-commerce, supported by venture capital.
- Card usage, especially credit cards, is low in Southeast Asia; only a fraction of offline merchants could install card readers.
- Digital wallets (inspired by Alibaba in China and Paytm in India) allowed users to store money on phones and transact without cash.
- Initial model: closed-loop platform wallets—efficient for platforms but fragmented for consumers and merchants.
- Regulators pushed for open, standardized infrastructure to enable payments across platforms and providers.

### Consolidation and standardization of domestic instant payment systems
- Singapore introduced PayNow in 2017: an instant payment system for peer-to-peer transfers using mobile phone or national ID numbers, and for businesses using unique entity numbers, real time, 24/7, for free.
- Singapore expanded NETS to support QR code payments at offline stores; these measures created a more open, connected payment landscape.
- Other national systems: Malaysia’s DuitNow; Thailand’s PromptPay; Indonesia’s BI-FAST and QRIS. All aim to unify domestic payments under national standards and establish public infrastructure usable by private fintech firms.
- Formal linking of national IPSs can “carry over the benefits of cheap, fast, seamless payments from the domestic to the cross-border arena.”
- Bilateral links exist: Thailand–Singapore established in 2021; subsequent links include Singapore–India, Thailand–Malaysia; Indonesia announced plans for QR code links with China and Japan.
- Technical and policy friction: each bilateral linkage required technical realignment and alignment in domestic policies (data privacy, security, sanctions screening); “It took three years of extensive collaboration between multiple stakeholders to finalize the 2021 PayNow–PromptPay linkage.”

### Project Nexus and NGP (Nexus Global Payments)
- Nexus concept: a multilateral payment gateway to make expansion more efficient than building many bilateral links; an IPS operator connects once to Nexus to reach all other network participants.
- NGP (Nexus Global Payments) was established by several central banks in April 2025 to improve cross-border connectivity.
- Project Nexus idea originated at the Singapore Innovation Hub (a Bank for International Settlements initiative).
- Requirements for Nexus adoption: common technical standards, common operating standards and processes (including data privacy and money laundering safeguards), and a consistent commercial model.
- Momentum timeline: “The region came together about two years ago, under the Indonesian G20 presidency, when the idea of regional payments connectivity was made a priority,” leading to NGP’s establishment and intent to scale globally.
- Implementation steps and expectations:
  - NGP is focused on foundational work to build capabilities and enable Nexus to go live.
  - It is expected to appoint a technical operator to build and operate the network this year, according to MAS’s Gay.
  - “We expect to see the first live cross-border transaction on Nexus around 2027,” he said, before expanding to other interested countries.

### Practical benefits and use cases
- Interoperability among standardized national QR code systems would benefit travelers and merchants.
- Allowing international fund transfers using a mobile phone or ID number via linked IPSs could be transformative for families relying on remittances within the region.
- Example of incremental innovation: QR codes attached to portable 4G-enabled speakers that deliver audio confirmation of payment amount received—useful for busy merchants and noisy market settings.

### Challenges and readiness gaps
- Large-scale cross-border adoption depends on sustained collaboration among governments, central banks, and fintech players.
- Smaller banks risk being left behind; many banks in Southeast Asia still “operate on legacy systems.”
- Banks face a bottleneck if they lack technology to tap into burgeoning IPSs.
- NGP’s vision of effortless cross-border movement of money among people, banks, and fintech firms “may take time.”

*Content by Nadine Freischlad, F&D SEPTEMBER 2025*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2025/09/freischlad.pdf_