Electronic Payment System in Indonesia - Photo: Special

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) noted the volume and value of electronic money transactions during January-September 2018 increased significantly compared to the same period last year.

Based on the central bank’ Payment System Statistics data, the volume of electronic money transactions during the period reached 1.99 billion transactions. The transaction rose nearly 277 percent compared to the same period last year with 547 million transactions.

Likewise, the transaction value has more than quadrupled from Rp7.5 trillion to Rp31.6 trillion (US$2.15 billion). Meanwhile, the amount of electronic money circulating until September 2018 reached 142.47 million, increased almost twice compared to the same period last year of 71.78 million.

Head of the BI Payment System Policy Department Onny Widjanarko explained that the increase of electronic money transactions was driven by toll payment transactions which increased rapidly after all non-cash toll payments were required from October 2017.

The increase in transactions was also driven by electronic money transactions on a number of e-commerce sites which were increasing. In addition, many non bank electronic money players have facilitated parking transactions and small shops.

The government began on Oct. 31, 2017 an implemented non-cash payment obligations for all toll payment transactions. This provision is regulated in the Regulation of the Minister of Public Works and Public House Number 16 Year 2017.

After the implementation of toll road payment, the government will implement the toll transaction system without stopping the vehicle (multi lane free flow) in December 2018.

Furthermore, according to Widjanarko, the use of electronic money will not only be for toll road transactions, but also for all public transportation such as  mass rapit and light rapid transit.

However, BI and related parties must pay attention to the readiness of technology before integrating these modes of transportation.
So far, 26 companies licensed with the central bank as electronic money operators 11 are banks and the rest are non-bank institutions, according to a list that was last updated on September 14 on BI’s website.

Indonesia’ 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 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 growth of e-commerce businesses was faster than the development of regulations. The latest regulation, PBI No. 18/ 17/ PBI/ 2016, does not consider more sophisticated instruments such as crypto currencies.

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