Bank Indonesia (BI) ensures that foreign payment service providers (PJP) can operate in Indonesia. But the company must have or get permission from BI first.
The payment service provider must not only have a license from BI but also have to bring a permit from the country of origin to run a business in Indonesia. This is stated in Bank Indonesia Regulation (PBI) No. 22/23/PBI/2020 concerning Payment System (SP).
"This means, (PJP) from abroad must have a permit and he must also have a permit at his place of origin as a PIP or PJP. So, it is impossible if he does not have the expertise to continue here without the expertise to do business," explained the Head of the System Policy Department. Payment of BI Filianingsih Hendarta, in a virtual press conference, Wednesday (14/7/2021).
PBI No 22 of 2020 also allows foreign investors to own shares in payment companies of up to 85 percent. This is quite a progressive step to develop digital innovation in Indonesia.
"Speaking of digitalization requires innovation, and innovation requires funding to be large. Meanwhile, we can see that domestic funding is also limited, so it is permissible (foreign ownership) of up to 85 percent," he stressed.
Even so, BI still restricts foreigners to control it. Where the foreign portion should not be controlling.
Bank Indonesia Simplifies 135 Payment System Rules into 1 Regulation
Previously, Bank Indonesia (BI) issued a new regulation that reformed 135 provisions related to the payment system into one as contained in Bank Indonesia Regulation (PBI) Number 22/23/PBI/2020 concerning the payment system. The simplification of these regulations is to respond to the rapid development of the digital financial economy in the country.
"We made one to accommodate the digital financial economy, strengthen and simplify regulations and also organize the industrial structure," said Head of the BI Payment System Policy Department Filianingsih Hendarta, Jakarta, Friday (1/8/2021).
Filianingsih said that the PBI was issued on December 30, 2020 and will take effect effectively on July 1, 2021. Later, the central bank will also make about 10 derivative rules following before the reform regulations take effect.
The new PBI will strengthen regulations regarding access to payment system operations (access policy), payment system operations to the termination of payment system operations (exit policy), BI functions in the payment system sector, integrated data management, and expansion of the testing space for technological innovations.
The regulation in the Payment System PBI is based on an activity and risk-based approach so that it is not one size fits all, especially in access policy and payment system implementation and supervision by BI.
In addition, the regulation in the Payment System PBI also prioritizes principle-based regulation and encourages optimization of strengthening the function of the Self Regulatory Organization (SRO).
The issuance of this provision is a manifestation of the implementation of the Indonesia Payment System Blueprint (BSPI) 2025, one of the initiations of which is to integrate regulation, licensing, supervision, and reporting, beginning with the reform of payment system regulations.
"The purpose of issuing this provision is to maintain a balance between efforts to optimize digital innovation opportunities with efforts to maintain financial system stability and payment systems in order to create a payment system that is fast, easy, cheap, safe, and reliable, while taking into account the expansion of access and consumer protection," filianingsih said.
In general, regulatory reforms are directed at reorganizing the structure of the payment system industry, as well as providing an umbrella for the overall payment system implementation in line with developments in the digital economy and finance.
