Jeniffer Stenlie, a business owner from Jakarta, was skeptical when she heard she could use her Indonesian banking app in Thailand. “Just scan a QR code at the sales counter,” a friendly Thai shopkeeper assured her during a buying trip in June 2022. Much to her delight, the payment went through immediately — and at a better conversion rate than she expected.

Stenlie, who runs a small women’s clothing business, scanned QR codes to pay in mall after mall in the glittering heart of Bangkok, as she shopped for shoes, food, and drinks. “From that moment, I preferred [QR] to credit cards or cash,” she told Rest of World

The QR codes that Stenlie scanned are part of an ambitious deal between Indonesia, Singapore, Malaysia, Thailand, and the Philippines — seemingly the first of its kind.

For the past several years, the central banks of these countries have been attempting to connect their systems, allowing their residents to use QR payments for cross-border transactions without any fees, generally at better conversion rates than those set by payment processors like Visa and American Express. After running a set of quiet pilot programs and sealing an official agreement in 2022, the system is beginning to catch on, anywhere from island party towns to high-end shops.

“The cross-border mechanism is quite simple … It loosens the local currency dependence on the U.S. dollar.”

In China and India, QR payments have revolutionized commerce. Powered by private-sector financial giants like Paytm and Alibaba’s Ant Group, even the smallest payment can be made by scanning a QR code. In the streets of Delhi, beggars wave printed QR codes at passing drivers. In China, it’s the most common method of payment for 95% of people, including even some thieves.

Adoption of QR payments is one thing, but being able to pay across country borders is another. While a Chinese tourist might be able to use an Alipay QR code at an accepting merchant in Japan or the U.S., the Southeast Asian network is a direct agreement between central bank systems.

“Actually, the cross-border mechanism is quite simple,” David E. Sumual, chief economist at Indonesia’s privately owned Bank Central Asia, told Rest of World. “It involves the central banks between two countries making a settlement agreement using their local currency, no longer through the U.S. dollar. So it loosens the local currency dependence on the U.S. dollar.” 

For travelers, the benefits are a lot more concrete. In April this year, Gisela Swagarita, a 33-year-old copywriter from Jakarta, was flushed with embarrassment when she realized she’d left her wallet at the hotel while on holiday in the Thai party town of Pattaya. But thanks to the cross-border QR code payment system, she was able to use her Indonesian banking app to pay at the small cafe where she had been eating. Swagarita was relieved. “Since I am a little bit forgetful, it’s more practical to do cashless and cardless payment,” she told Rest of World.

The scheme is still in its early stages, with no official data available yet on the number or value of transactions made. But public announcements show the system is now active between Indonesia, Malaysia, and Thailand, with Singapore partially linked and the Philippines looking to join in the near future. The five countries make up around 85% of Southeast Asia’s economy, and are a hub of tightly interlinked commerce and travel.

Not all shops across the participating countries have accepted the cross-border QR system so far; it’s mostly available in the bigger stores accustomed to tourists. 

A screenshot taken from a mobile phone showing it being used to read a QR code through a payment program.

The agreement’s momentum reflects the pandemic-era jump in QR code payments in the participating countries, especially in Indonesia. While digital wallets are still its favored method for non-cash payments, Indonesia is far and away the leader in QR adoption in Southeast Asia: QR payments in the country have tripled nearly every year since launching in 2019.

Indonesia’s national QR code system — Quick Response Code Indonesian Standard, or QRIS — is “a revolution,” Teguh Yudo Wicaksono, head of the Mandiri Institute, the research arm of Indonesia’s state-owned Bank Mandiri, told Rest of World. “It unlocked many opportunities, especially for the unbanked population.” Merchants don’t need to purchase a bulky card-reader, though they can use one if they already have it, and transaction fees are as low as 1,500 rupiah (10 cents). Card companies, on the other hand, charge anywhere between 2,500–6,000 rupiah. 

Each participating country has its own national QR code system, much like QRIS. In Singapore, it’s part of the wider-ranging NETS system, while Malaysia uses DuitNow and Thailand has PromptPay.

According to a G20-related panel discussion in 2022, reported Bloomberg, the next step is for central banks from the ASEAN countries to connect this network with other regional groups globally. The aim is to establish a similar framework for instant bank transfers, and potentially, even central bank digital currencies in the future.

Sumual, of Bank Central Asia, emphasized that QR code-based linkages are the first step, pointing out that technology trajectories are fickle. “Right now, QR can be used anywhere, but we will never know for sure how long this system will be popular,” he said. “In a couple of years, we could have a more innovative payment system. So [it all] depends on the public.”