A new era of seamless financial connectivity between Asia’s economic powerhouses has begun. In a landmark move for regional commerce, travelers and businesses between China and Indonesia can now bypass traditional currency exchange hurdles thanks to a newly launched cross-border QR payment system. This initiative, a key government-to-government project, promises to revolutionize the retail experience for millions.
A Sandbox for Seamless Transactions
The pilot program, which commenced this week, allows for direct QR code payments between the two nations. In a demonstration of the technology, a transaction was successfully completed in Beijing using an Indonesian mobile payment application. Simultaneously, in Jakarta, whitelisted users made purchases at pilot merchants by scanning Indonesian QRIS codes with Chinese apps, including the UnionPay App and Alipay.
During this initial sandbox phase, selected users from mainland China can utilize their preferred mobile wallets to pay at a staggering network of over 40 million QRIS merchants across Indonesia. Conversely, pilot merchants within the UnionPay and Alipay networks in China can now accept payments from users of 22 mainstream Indonesian payment apps.
Building a Collaborative Financial Ecosystem
This breakthrough is the result of extensive collaboration under the guidance of the Chinese and Indonesian central banks. The project gained significant momentum in January when UnionPay International (UPI) signed a memorandum of cooperation with the Indonesian Payment System Association (ASPI), Ant International, and the Bank of China (Hong Kong) Jakarta Branch.
To accelerate implementation, UPI subsequently forged separate agreements with Indonesia’s four major switch networks—Rintis, ALTO, Artajasa, and Jalin—alongside Ant International and Alipay. This multi-stakeholder approach has been crucial in building the necessary infrastructure for interoperability.
Local Currency Settlement and a New Four-Party Model
A critical feature of the agreement is the use of local currencies for settlement. This arrangement eliminates the need for US dollar conversion, reducing costs for consumers and merchants alike. It is designed not only to streamline the cross-border mobile payment experience for residents but also to help merchants in both countries tap into a broader customer base.
The project is also hailed as a significant step in UnionPay’s strategy to pioneer a new four-party model, extending collaboration further across the industry value chain to foster win-win cooperation. This model positions UPI to play a pivotal role in the evolving global payments landscape.
The Future of Cross-Border Payments
While the current pilot is limited to whitelisted participants, the system is expected to be fully operational by the end of 2025 following the successful completion of the sandbox phase. This initiative places the China-Indonesia corridor at the forefront of financial innovation.
UnionPay has already established or is pursuing similar cross-border QR payment linkage with payment networks in 19 other countries and regions outside the Chinese mainland. This latest development with Indonesia signals a firm commitment to scaling up global payment connectivity, paving the way for a more integrated and efficient international digital economy.
