Policy Review: Next Phase of NPG Program Should Merges With FinTech

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) is ready to implement the second phase of the National Payment Gateway (NPG).

The central bank and stakeholders in the payment providers will sit together to draft a new standard to regulate the quick response codes technology (which allows merchant to take payment faster from digital e-wallet), amid fast rising use of such technology by among payment service providers.

TheInsiderStories believes authorities are on track with their preparations to launch the second phase of the NPG, which basically will allow lenders to lower banking transaction costs through more efficient processes.

However, the Bank should notice the recent innovations that have been delivered by many financial technology (FinTech) companies, particularly those who involve in payment system business, should help accelerate the cashless society, as targeted by the NPG program.

The fast growing FinTech payment system business can be used to push Indonesia’s economic growth by innovation in the future. The collaboration of NPG and FinTech will not only offer financial gains but should also feature non-financial benefits.

Through the system, respective institutions will be able to obtain valuable data (that which information technology practitioners call ‘big data’) by observing public spending patterns, lifestyles, trends as well as the export-import traffic.

Today, there are many payment service providers were established in Indonesia. For instance, there are Doku, GoPay, and Kudo.

This kind of payment gat e-ways is still inferior if compared with other payment methods both conventional method like transfer based and modern method which are provided by bank institution such as KlikBCA (owned by PT Bank Central Asia Tbk) and Mandiri Online (owned by PT Bank Mandiri Tbk).

But, we can’t resist this new payment method is growing rapidly inline with e-commerce business growth in Indonesia. Because, unlike other countries that already have a more mature startup ecosystem, credit card penetration rate in Indonesia is still very low, which less than 5 per cent. On the other hand, 40 per cent of Indonesians do not have bank accounts.

The vibrant of e-commerce business growth in Indonesia likely becomes a challenge as well as a good opportunity for local payment gateways.

In other side the development of payment gateways in Indonesia might be better if the payment gateway providers can fulfill the needs of merchants about some aspects such as performance, effort, social, facilitation, costs, security and other matter that influence payment gateways providers to serve online payment system in Indonesia.

Since, it can be clearly seen that in Indonesia payment system is one of the major problems that e-commerce industry should be faced.

Moreover, not only the payment gateway providers should comply with requirement by merchant, but also Indonesian government should take actions in order to protect and comfort the e-commerce industry in Indonesia. As it is believed, Indonesian e-commerce industry will have a huge opportunity in the future.

Email: elisa.valenta@theinsiderstories.com