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) – Two major global digital payment platform players from China, Wechat Pay and Alipay  entered Indonesian market through state-owned lender PT Bank Negara Indonesia Tbk (IDX: BBNI) Tbk, one official told TheInsiderStories.

The bank’s Vice President Director Herry Sidharta, said BBNI expect to finalize the collaboration before the end of 2018. Now, the the planned in a legal process.

He stated, the patnering has potential to attract revenues around Rp2 trillion (US$133.33 million) from Chinese tourist who visit the country. Sidharta hopes the bank get around Rp100 billion of fee income from the transaction.

Furthermore, Director of Technology and Information Dadang Setiabudi explained, in this collaboration, the lender will become payment gateway for Wechat and Alipay’s customers transaction in Indonesia.

Through this service, Dadang hopes China tourists who visit Indonesia can transact easier.  In addition, merchants also can earn more income.

“We also hope that this collaboration could invite more merchants to receive payments with Yap application,” he said.

Yap application is a payment solution by scanning the QR code through smartphone. The source of funds from the payment method can use credit, debit and UnikQu cards.

Previously, Senior Deputy Governor Bank Indonesia (BI) Mirza Adityaswara 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.

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