Onny Widjanarko, left, head of the transformation program at Bank Indonesia, and Eni V. Panggabean, head of the central bank's payment system policy and oversight department, attending a media conference in Jakarta on Thursday (06/07).

Bank Indonesia Issues National Payment Gateway Regulation


JULY 07, 2017

Jakarta. The central bank published a new national payment gateway regulation on Thursday (06/07) in a bid to provide an efficient and secure payment system for banking customers in the country.

"We need to organize the infrastructure, institutions, instruments and mechanisms to build a resilient, integrated national payment system," said Onny Widjanarko, head of the transformation program at Bank Indonesia.

The regulation contains an explanation of its purpose, identification of the institutions related to the NPG, supervision and sanctions.

Onny said the regulation seeks to make transactions easier and cheaper for banking customers by allowing all electric money, debit and credit cards of any issuers to be accepted at any automatic teller machine, electronic data capture device or payment gateway in the archipelago once the regulation is fully implemented.

"You can imagine how many cards you need to keep in your wallet now. With NPG, it doesn't need to be like that anymore," he said.

There are currently hundreds of debit card issuers, 26 credit card issuers and 25 electronic money issuers in Indonesia, with most of them being local players.

Most of ATM and debit principals – which provide infrastructure – are also local companies, while the credit card principals are all units of foreign companies, such as JCB Internasional Indonesia, Mastercard Indonesia, UnionPay Indonesia and Visa Worldwide Indonesia.

According to the new regulation, foreign principals need to work with local switching companies such as Artajasa Pembayaran Elektronis, Alto Network and Rintis Sejahtera.

Bank Rakyat Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Central Asia – which represent 75 percent of all domestic debit transactions – and the national principals acting as switching companies, signed a memorandum of understanding in December in support of the central bank's plan to implement its NPG initiative.

Eni V. Panggabean, head of the payment system policy and oversight department at Bank Indonesia, said other countries that have implemented similar systems include China (with China Union Pay), Malaysia (MyCard) and Japan (JCB).

"We are indeed a little behind but there is no such thing as too late," Eni said.

She added that Indonesia needs more time to prepare for the implementation due its population of more than 250 million people.