This story comes from Regulation Asia and summarizes the March 26 launch of a cross-border retail QR code payment initiative between the central banks of Thailand and Vietnam.
There is ongoing collaboration between ASEAN nations for the past several years vis-à-vis payments initiatives, so this is the first of a likely stream of similar launches over the next few years.
‘In the first phase of the project, tourists from Thailand will be able to make QR payments using their mobile phones to pay for goods and services in Vietnam and vice versa. Tourist flows between the two countries totalled around 1.5 million in 2019….The two central banks said Thai tourists using Bangkok Bank’s mobile banking app can scan ‘Viet QR Codes’ to pay for goods and services at merchants of Vietnam’s TP Bank and BIDV. Additionally, tourists from Vietnam using TP Bank and Sacombank’s mobile banking app can scan the ‘Thai QR Codes’ of Bangkok Bank merchants in Thailand.’
The article does not mention settlement details or FX components, but we assume this is not a real-time payments scenario and contains some net settlement scheme with pre-agreed rates. As readers will know, cards and local cash currency have been sort of the default payment methods for cross-border tourism, since cards have a built-in FX settlement scheme for major network participants and cash exchanges are relatively simple in most airports and elsewhere.
So in this case there is an account-to-account transfer with likely lower direct costs for merchants, although no pricing is discussed in the piece. There are very few banks involved, so this would be expected to grow over time as more banks and merchants participate.
‘SBV Deputy Governor Nguyen Kim Anh said the launch marks an important milestone in the collaboration of ASEAN central banks in implementing ASEAN’s initiative on payment connectivity using interoperable QR Codes to deepen regional economic integration and foster digital transformation of each economy….BOT Deputy Governor Ronadol Numnonda said the pilot project would offer convenience and security for people travelling between the two countries, leading to a more digitalised society….The project is a collaboration of various Thai and Vietnamese stakeholders under the joint stewardship of the SBV and BOT. The stakeholders include the NAPAS (National Payment Corporation of Vietnam) and the NITMX (National ITMX) as switching operators, while Vietinbank and Bangkok Bank serve as the cross-border settlement banks.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group