The huge potential of the digital financial economy (EKD) in Southeast Asia promises a bright future for the financial technology (fintech) industry. The convenience for both users and merchants paves the way for businesses to reach a wider market share and multiply profits. In order to maximize this potential, maintaining transaction security as one of the pillars of the EKD is crucial to close loopholes that can lead to losses.
The urgency of maintaining transaction security was revealed in the views of the panelists of the public discussion "QR-Based ASEAN Cross-Border Payment System: Opportunities, Challenges, and Future Directions" organized by the Indonesia Fintech Society (IFSOC) and the Center for Strategic and International Studies (CSIS) Indonesia at the CSIS Auditorium, Jakarta, Wednesday (1/10/2025).
Artajasa President Director Armand Hermawan assessed that currently, bilateral connectivity mechanisms tend to be preferred because they are effective and efficient, and do not require too complex mechanisms.
Meanwhile, multilateral connectivity, besides requiring the creation of hubs such as Project Nexus initiated by the Bank for International Settlements (BIS), also has the potential to include countries with non-uniform infrastructure capacity and switch technology. Instead of being effective, the inclusion of non-uniform countries can actually weaken connectivity.
"Various platforms such as QRIS in Indonesia, PromptPay in Thailand, DuitNow in Malaysia, or PayNow in Singapore can actually grow because their user merchants are micro, small, and medium enterprises. The bilateral mechanism allows the development of the platform to be faster," Armand explained.
Currently, with the number of QRIS users reaching 57 million users and 39.3 million merchants in Southeast Asia, Armand does not deny the potential use of QR is as great as the potential loss of Southeast Asia forfraud, which currently reaches USD36.5 billion every year. One case that Armand remembers is handling a suspicious transaction of buying 10 martabak with a value of Rp10,000,000.
"If suspicious transactions like this are caught, only banks can block them, while service providers cannot do anything. In fact, fraud motives are now increasing with the widespread use of fake QR, engineering the transfer of destination accounts, account takeover, to the use of fake merchant identities," he said.
From Artajasa's experience in handling fraud cases, a number of steps to close fraud loopholes have been taken, including conducting regular fraud assessments , increasing the frequency of mobile application updates, improving monitoring, and measurable vulnerability assessments.
Chairman of Indonesia Fintech Society (Ifsoc) Rudiantara stated that digital payment connectivity is not only about infrastructure, but also readiness to develop complex systems to create convenience.
"Therefore, I request that digital payment should not only be seen as a service, but as one of the components of the digital economy, as agreed in DEFA," Rudiantara said in his speech, referring to the ASEAN Digital Economy Framework Agreement that has been prepared since Indonesia's chairmanship of the 2023 ASEAN Summit.
With a digital economy worth US$2 trillion by 2030, Rudiantara emphasized that the potential for digital economy acceleration is a necessity for Southeast Asia's future to survive amid the current disruption.
Therefore, all elements supporting EKD, from personal data protection (PDP), cybersecurity, to information and communication technology (ICT) infrastructure, need to be encouraged simultaneously to ensure that the potential of digital payment connectivity is not wasted.
Strengthen regulation, form preferences
The coordination of central banks as regulators in closing the loopholes of cross-border fraud continues, despite facing a number of limitations. Bank Indonesia Payment System Policy Director Ryan Rizaldy revealed that there are at least four challenges for the central bank to coordinate the handling of QR-based digital financial fraud .
First, the inability to detect anomalies and act in real-time. Second, unclear response procedures and information exchange. Third, delayed alerts to relevant parties. Fourth, weak coordination between banks, central banks, and switching partners of payment service providers. According to Ryan, these problems can actually be more easily overcome through an effective multilateral connectivity mechanism.
"While multilateral interconnections make it possible to address issues efficiently, implementation is also much more complex. The challenges are by no means small, such as the implementation of Project Nexus which reduced the fee for sending remittances of Indonesian migrant workers from abroad from 13% to 2% today," Ryan explained.
In his capacity as the central bank, Ryan stated that Bank Indonesia has prepared the Indonesian Payment System Blueprint (BSPI) 2030 which supports the integration of EKD in a consolidated and resilient structure. The aim is to ensure the central bank's function in the money circulation process, monetary policy, and ultimately, to ensure national interests are facilitated.
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Center for Strategic and International Studies (CSIS) Economic Department Researcher Dandy Rafitrandi assessed that maintaining transaction security is one of the keys to building trust and forming preferences for using QR codes for digital payments.
"Awareness is another challenge. With a financial literacy level of 57 out of 100, not many users realize their QR technology can be read in other countries. This also depends on their digital payment preferences," said Dandy.
He gave an example, in Saudi Arabia, for example, people there prefer contactless cards or cash to QR. In Vietnam, Vietnamese people use QR more for transactions abroad than within the country. As a result, even though QR-based payment platforms are increasingly massive, the low level of reciprocal usage can reduce the effectiveness of the platform.
"A policy option that the government can pursue is to incentivize retailers who use QR, instead of charging them a fee or admin fee. With 60% of merchants being UMKM, more efficient digital payments can have a positive effect on GDP growth too, eventually," Dandy concluded.
Armand added that with the increasing use of QR payments at tourism spots, it is possible that tourism marketing will make ease of payment a regional tourist attraction.
"PayNow once allocated their marketing funds to encourage Indonesians in Singapore to transact in larger amounts than just buying nasi kandar. The same is true in Thailand. If we can shape their preferences, the volume of reciprocal transactions can increase and reduce the loss of one country," he said.
