JAKARTA (TheInsiderStories) – Bank Indonesia (BI) has officially granted WeChat Pay, a Chinese mobile payment app developed by Tencent, a permit to operate in the country, said the governor yesterday (01/16) as reported by local media. The central bank released the permit on Jan. 1
The regulators agreed to give the permit after WeChat Pay formed a partnership with private lender PT Bank CIMB Niaga Tbk (IDX: BNGA).
Since last year, WeChat Pay and its competitor Alipay eager to enter Indonesian market. But BI not give permit and urged them to join local partner to realize their desires.
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.
WeChat Pay is a payment feature integrated into the WeChat app, users can complete payment quickly with smart-phones. Last year over 1.08 billion monthly active user accounts registered at the company’ platform.
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