ASEAN+3 (China, Japan, South Korea) should strengthen cross-border payment connectivity to support regional integration and resilience amid rising global fragmentation and rapid digital transformation, according to a new study by AMRO.
The study notes that globally, cross-border payments can be slow, costly, and opaque, reflecting continued reliance on multiple intermediaries and legacy infrastructure.
While the region has made strong progress in retail payment connectivity, progress in wholesale cross-border payments has been slower—held back by structural challenges including fragmented regulatory frameworks, technical disparities, and shallow local currency foreign exchange markets. The report highlights that strengthening wholesale payment connectivity will be critical to supporting trade, investment, and deeper regional financial integration.
“The global cross-border payments infrastructure has served the financial system well but has room to be more efficient,” the study noted. The global cross-border payment infrastructure largely consists of correspondent banking chains and international card networks. While robust, it has inefficiencies such as longer processing times, higher costs, limited access, and lack of transparency. These issues can be attributed to the presence of multiple intermediaries (routing complexity), non-aligned data formats (at times needing manual repairs, a key hindrance to straight-through processing), different working hours (due to different time zones and banking hours), and multiple compliance checks.
The study also examined the growing role of tokenized payment solutions such as central bank digital currencies (CBDCs) and stablecoins. While these technologies could improve the efficiency of cross-border payments, they also raise policy and regulatory challenges related to monetary sovereignty, financial stability, and cross-border oversight.
According to the report, ASEAN+3 will need stronger interoperability, closer regional coordination, and a multilayered payment ecosystem where different payment systems and technologies can operate together effectively. The study emphasizes that regional initiatives should complement—not replace—global integration while helping strengthen the region’s resilience in an increasingly fragmented global environment.
