PT MDI Ventures, the investment arm of state-owned  telecommucation firm, PT Telkom Indonesia Tbk (IDX: TLKM) and other investors invested US$20 million Hong Kong-based digital payments QFPAY - Photo by YAP

JAKARTA (TheInsiderStories) – PT MDI Ventures, the investment arm of state-owned  telecommucation firm, PT Telkom Indonesia Tbk (IDX: TLKM) and other investors invested US$20 million Hong Kong-based digital payments QFPAY, said the company today (08/13). The new funding led by returning investors Sequoia Capital China and Matrix Partners, Japan’ Rakuten Capital and Venture.

According to Crunhbase, this brings the unit of Wechat Pay and Alipay’ unit so far raised $36.5 million. The funding will be used to develop new digital payment products.

Founded in 2012, QFPay first launched in China and is known for its QR code-based technology. Its products include end-to-end online and offline mobile payment solutions and add-on services like food ordering and customer loyalty programs.

The company claims that it has served over 1.2 million merchants and processed over 1 billion transactions. QFPay is currently present in 13 markets such as Cambodia, China, Hong Kong, Indonesia, Japan, Korea, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and United Arab Emirates.

In a statement, co-founder and CEO Tim Lee said “We have built our track record, know-how and expertise in this industry since we launched in China, which is dubbed as the birthplace of digital payment. We are excited to leverage what we have learned in the past seven years to help lead the cashless movement in the rest of Asia as demand for digital payment, particularly QR-code payment method, heats up.”

Last year, two major global digital payment platform players from China, Wechat Pay and Alipay  want to entered Indonesian market through state-owned lender PT Bank Negara Indonesia Tbk (IDX: BBNI). But based on the domestic regulation the companies call off the planned. Initially, the patnering has potential to attract revenues around Rp2 trillion (US$133.33 million) from Chinese tourist who visit the country.

Previously, Bank Indonesia (BI) said, Chinese tourists hold a significant role to boost tourism and small medium enterprises sectors in the archipelago. Therefore, he added, the central bank will facilitated WeChat Pay and Alipay as major platform services of Chinese tourist to do business in Indonesia through BBNI.

Bank Indonesia has put a 49 percent limit on foreign ownership in companies that offer electronic money services in a bid to better regulate such services amid growing interest in financial technology.

The limit was set by central bank to all electronic money issuer companies, both operating and newly handing permits. The rules said, every company offering payment in electronic money services also must obtain a permit from BI.

The new foreign ownership limit applies only to new investment, or to any existing firm who is changing ownership. Based on central bank regulations, e-money businesses should secure a license from BI for various payment system service providers such as: Principal, Issuer, Acquirer, Clearing Operator and Final Settlement Operator.

Indonesia’s e-commerce industry is expected to grow rapidly in the years ahead and therefore Bank Indonesia set new rules to ensure that all firms maintain “the principles of prudence and adequate risk management” in accordance with national interests and consumer protection.

Google Inc. and Temasek Holdings Pte. Ltd., recently released joint research that shows Southeast Asia’s digital economy (which includes a variety of segments including e-commerce, online games, and online advertising) will rise to $200 billion by 2025.

Indonesia’s digital market is forecast to account for 40.5 per cent – or $81 billion – of this total market in the region. With an estimated $46 billion, Indonesia’s e-commerce sector will contribute most to the total.

BI first introduced regulations for e-money in 2009 (PBI No. 11/ 12/ PBI/ 2009). They went through two rounds of revisions, in 2014 and 2016, to keep up with developments in the digital economy. The latest regulation, PBI No. 18/ 17/ PBI/ 2016, does not consider more sophisticated instruments such as crypto currencies.

US$1: Rp14,200

Written by Staff Editor, Email: theinsiderstories@gmail.com