The State Bank of Vietnam on August 25 signed a Memorandum of Understanding (MoU) with the central banks of five other ASEAN nations to join the Regional Payment Connectivity (RPC) initiative.

Pham Thanh Ha, Deputy Governor of the State Bank of Vietnam (third, right), at the Regional Payment Connectivity signing ceremony on August 25. Photo: The Hanoi Times

The signing ceremony was part of the 10^th Meeting of the ASEAN Finance Ministers and Central Bank Governors (AFMGM) held in Jakarta, Indonesia.

The five other ASEAN central banks that created the initiative are Thailand, Indonesia, Malaysia, Singapore, and the Philippines. Vietnam is the sixth member state of the initiative.

Their agreement was reached on November 14, 2022, on the sideline of the G20 Summit in Bali, Indonesia.

The initiative aims to make cross-border transactions faster, more transparent and cost-efficient, and assure benefits and obligations of consumers.

Under the MoU, central banks will foster the regional payment network through the use of QR codes, quick payment and other tools.

The central banks will also cooperate in developing a proper risk-hedging mechanism through talks, discussions and information exchanges.

Up to now, the member states of the initiative have established nine bilateral agreements in using QR codes for cross-border transactions. They are working to develop 10 more.

In wire transfer, the regional nations have operated three connections and are working on five new ones.

Deputy Governor Pham Thanh Ha said the State Bank of Vietnam commits to deeper regional integration and cooperation in electronic payment, which suits the idea of the Vietnamese Government to foster cross-border payment associations.

The initiative will mean a big step forward for the ASEAN nations to strengthen their presence in the global financial market.

Current member states of the initiative will encourage other nations to join them, to not only bolster the regional payment network but also tap into other markets in the world.

The RPC initiative will also enhance Vietnam’s international trade and economic cooperation, thus hastening its socio-economic growth in the post-pandemic stage.