Foreign digital wallet companies in Indonesia must use the rupiah currency and the QR Indonesia Standard (QRIS), the local standard quick response code used in digital transactions. (B1 Photo/Mohammad Defrizal)

Alipay's Entry to Indonesia Delayed as Bank Indonesia Asks for Paperwork Revision


JANUARY 27, 2020

Jakarta. Bank Indonesia, the country's central bank, has told Chinese digital wallet company Alipay to rework their application for operating a payment service in Indonesia in collaboration with state-controlled lenders Bank Mandiri and Bank Rakyat Indonesia.

Alipay and rival WeChat Pay have made public their plans to operate in Indonesia last year. Today, only the latter has managed to make the incursion into the key market, which is expected to make up a lion's share of Southeast Asia's $1 trillion digital payment market in the next five years according to a joint study from Google, Temasek and Bain & Company. 


For Alipay, the drag was in their paperwork, according to Sugeng, the deputy governor of the central bank (BI). 

"We've asked for corrections in the application and returned it to them. Some of the documents were incomplete," Sugeng told the House of Representatives' Commission XI overseeing finance and banking in a hearing on Monday.

Sugeng said Indonesia requires foreign digital wallet companies to form a partnership with local banks before they can operate here. Digital wallet services have to be transparent with their local partners and meet the Indonesian Institute of Certified Public Accountants' (IAPI) accounting standards.

"Foreign fintech companies must be open with their partners. The local banks should reciprocate so they can use each other's [platform]. Banks need fintech and fintech needs banks," Sugeng said. 

So far, WeChat Pay is the only foreign digital wallet service that has been able to obtain permission from BI to operate in Indonesia through a partnership with Bank CIMB Niaga.

BI Governor Perry Warjiyo said foreign digital wallet companies wanting to roll out operations in Indonesia must use the rupiah currency and the QR Indonesia Standard (QRIS), the local standard quick response code used in digital transactions. The code often appears as a small square filled with randomly-placed black and white rectangles. 

"Fintech companies must use QRIS. If you don't use QRIS, we will ban and shut down your system," Perry said. 

"We want the fintech and banking systems to be connected. We encourage an open banking and fintech infrastructure so we can connect all payment transactions. It's easy to do that now with the Open Application Programming Interface [API]," he said.