The State Bank of Vietnam (SBV) has officially become a participant in the Regional Payment Connectivity (RPC) initiative in a notable move that builds upon the Memorandum of Understanding on Cooperation in Regional Payment Connectivity (MOU RPC), initially introduced by the central banks of Indonesia, Malaysia, Philippines, Singapore, and Thailand during the G20 Leaders’ Summit on November 14, 2022, in Bali.

The extension of the RPC to encompass additional ASEAN members emerges as a directive from the 9th AFMGM and holds the status of a priority under the ASEAN 2023 Indonesia Chairmanship.

QR-codes and fast-payment-based cross-border transactions

The RPC initiative was conceived with the primary objective of fortifying collaboration on payment connectivity, with a focus on creating faster, more cost-effective, transparent, and inclusive cross-border payment solutions.

The collaboration encompasses various modalities, including QR-code and fast-payment-based cross-border transactions. Ultimately, the RPC aspires to simplify inter-country payments, rendering them seamless, convenient, and affordable. This initiative facilitates frictionless transactions for both individuals and businesses within the ASEAN region.

The inclusion of the State Bank of Vietnam amplifies the RPC coalition from five to six ASEAN central banks. The expanded partnership carries the overarching goal of bolstering post-pandemic economic activities across the ASEAN region.

This includes stimulating tourism and other service sectors, which play an integral role in the region’s economic landscape. Furthermore, this initiative is poised to yield substantial advantages for small and medium-sized enterprises, crucial contributors to the region’s economic growth.

Engendering increased trade and remittances within the ASEAN region

By interlinking their payment systems, ASEAN member states can engender increased trade and remittances within the region. This endeavor is expected to contribute significantly to advancing the region’s financial inclusion objectives while propelling the overall progress of the ASEAN economic community.

Looking ahead, the RPC framework holds the potential for extension to neighboring economies and even countries beyond the ASEAN region.

The inclusion of SBV emphasizes the collaborative spirit within the ASEAN region, as central banks unite to develop and implement cross-border payment solutions that align with the evolving technological landscape. By facilitating seamless cross-border payments, the initiative directly contributes to the AEC’s vision of a single market and production base, which in turn bolsters economic growth and stability.

The RPC initiative’s focus on providing affordable and convenient cross-border payment solutions has the potential to significantly advance financial inclusion across the ASEAN region.