Non-Cash Payment Transactions
Processing in Indonesia
Through
ATM
&
EDC/Physical Reader
Using Credit Card, ATM
Card, Electronic Money
Chip Based
Through
Internet
Payment
Gateway (Virtual EDC)
Using CBP, Electronic
Money Server
Through Platform E-Payment
Using Proprietary Channel (SMS, USSD,
STK, web, mobile, e- wallet).
Using Electronic Money
Server Based.
E-money
Elements of e-money:
- Issued based on the value of the money deposited to the issuer
- The value of the money is stored electronically in a media server or chip
- Used as the payment instrument to merchants who are not the issuers of such e-money
- The value of such e-money managed by the issuer shall not be in the form of savings
Payment System Providers are prohibited to process payment transaction with a virtual currency obtained through mining, purchase or rewards, e.g. Bitcoin, Blackcoin, Dash, Dogecoin, Litecoin.
Electronic service to store data of instrument for payment among others CBP (card based payment) and/or electronic money, which can also store money, to conduct payment.
Types of e-money
- Non-registered : value up to IDR 1million - Registered : value up to IDR 10million
Monthly maximum transactions up to IDR20 million License will be required if the
active user has reached at least 300,000 user.
Maximum fund that can be stored in E-wallet IDR 10million.
Payment gateway enables merchants to process payment transaction process with payment tools that utilize cards, electronic money and/or proprietary channel.
Payment gateway provider:
a. Transmits data on payment transaction from merchant to Acquirer or Issuer (facilitator); or
b. Transmits data on payment transaction from merchant to Acquirer or Issuer and payment settlement from Acquirer to Issuer to merchant (merchant aggregator).
E-money is distinct from “stored value “ which stands for a non cash payment instrument, the value of which is stored in one media yet partially or wholly not fulfilling the elements of e-money .
E.g. Starbucks cards which can only be used to enter into transactions at Starbucks.
Credit Card
Debit/ATM
Card
•
Bank Indonesia (“BI”) Regulation No.18/40/PBI/2016 regarding Provision of Payment Transaction
Processing
•
BI Circular Letter No.18/41/DKSP regarding Provision of Payment Transaction Processing
Payment Transaction Processing
•
BI Regulation No.11/11/PBI/2009 regarding Provision of Card Based Payment (“CBP”) Instrument
and its amendments
•
BI Circular No. 11/10/DASP regarding Provision of Card Based Payment Instrument and its
amendments
Card Based Payment Instrument
•
BI Regulation No. 16/8/PBI/2014 regarding E-money and its amendments
E-Money
•
Law No. 3 of 2011 regarding Fund Transfer
•
BI Regulation No. 14/23/PBI/2009 regarding Fund Transfer
•
BI Circular Letter No. 15/23/DASP regarding Provisions of Fund Transfer
Fund
Transfer
•
BI Regulation No.19/8/PBI/2017 regarding National Payment Gateway
National Payment Gateway
Payment System Service Provider
Bank or other Non Bank Institutions that provide payment system service processing
Pre-transaction
Authorization
Clearing
Settlement
Post Transaction
Initial transaction
process to start the
payment
transaction process
inter alia printing of
cards,
personalization of
cards and supplying
of infrastructure.
Approval on Payment
Transaction
Exchanging or
assimilating data
and/or information in
terms of calculation
of rights and
obligations between
parties.
Settlement activity
that is final and
binding on financial
rights and obligations
on each implicated
parties.
Activities after the final
settlement of a payment
transaction has been
conducted.
Supporting Provider of Payment Transaction Processing
Parties that support the implementation of transaction payment processing
Payment System Service Providers
PAYMENT SYSTEM SERVICE PROVIDER
PROCESSING
Bank
Non-Bank Institution
Issuer
Principal
Acquirer
Settlement Provider
Clearing
Fund Transfer Provider
Payment Gateway
E-Wallet
Switching
Printing & Personalization of cards, Safety Features
Providers,
ATM/EDC
Terminal
Providers,
Data
Center/Data Recovery Center Providers, etc.
Payment System Service Providers
Issuer
Banks or non-bank institutions which issue the CBP instrument
or e-money. The non-bank institutions that can issue a credit
card must be a financing company that obtained license from
the OJK to issue credit card. The non-bank institutions that can
issue a debit card and ATM card must have the authority to
collect public funds.
Principal
Banks or non-bank institutions carrying out the principal CBP
instrument s or e-money, i.e. management of system and/or
network of its members (issuers and/or acquirers).
Clearing Provider
Banks or non-bank institutions carrying out the calculation of
financial rights and obligation of each of the Issuer and/or
Acquirer in CBP instruments or e-money.
Final Settlement Provider
Banks or non-bank institutions carrying out final settlement of
the financial rights and obligations of each of the Issuer and/or
Acquirer in CBP instrument or e-money transactions based on
the calculation of the Clearing Provider.
Acquirer
Banks or non-bank institutions cooperating with merchants
which can process the CBP instruments or e-money data issued
by other parties.
Fund TransferProvider
Banks or non-bank institutions carrying out fund transfer
activities.
Switching Provider
Bank or non-bank institutions providing infrastructures that
function as the center and/or connector of data for payment
transaction processing through network that utilize payment
method such as card, electronic card and/or fund transfer.
Payment Gateway Provider
Bank or non-bank institutions providing electronic service
that enables merchants to process payment transaction
process with payment tools that uses cards, electronic money
and/or proprietary channel.
Electronic Wallet Provider
Licensing requirements
Every party that acts as Payment System Service
Provider is obligated to obtain a prior license from
In the payment transaction process, Payment
System Service Providers can cooperate with
Supporting Provider in order to support the
implementation of payment transaction
processing.
Supporting Providers are among others:
•
Provider of card Printing;
•
Provider of personalization of payment;
•
Provider of
data center
and/or
disaster
recovery center
;
•
Provider of terminal among ATM, EDC,
and/or
reader
;
•
Provider of safety features of payment
instrument and/or payment process;
•
Provider of supporting technology for
contactless
support;
•
Provider of routing and supporting data
for payment transaction process.
Payment System Service Provider may engage
Supporting Providers in all steps of payment
transaction processing.
Parties that apply for a principal license for switching, clearing, and final settlement
must be in the form of a Limited Liability Company and whose shares are at least 80%
owned by:
1. Indonesian citizens; and/or
2. Indonesian legal entity.
Then the calculation for foreign ownership includes:
1. Direct ownership: counted based on 1 level of share ownership above prospective
Principal, Switching, Clearing and Final Settlement.
2. Indirect ownership: counted based on 2 level share ownership above prospective
for Principal, Switching, Clearing and Final Settlement.
The calculation of foreign ownership for public companies is only conducted for share
ownership with a percentage of 5% or more.
BI conducts supervision over the fulfillment of share ownership percentage.
Parties
Banks and non banks institution functioning as: - Issuers;
- Acquires;
- Payment gateway providers; - Other parties stipulated by BI
Service Institution:
- Has the duty to ensure the security of payment transactions and the confidentiality of customer data; carry out reconciliation, clearing and settlement, and developing systems for fraud prevention, risk management and risk mitigation; managing life cycle over secure access module (SAM) and mobile apps; handling disputes over payment transactions in the framework of consumer protection
- Its shares must be jointly owned by Switching Institution and Commercial Bank based on Business Activity (BUKU) 4 (four) in which the majority of its shares are owned by Indonesian citizens and/or Indonesia legal entities
Parties connected to the NPG must be members of at least 2 (two) Switching Institutions, except for instruments that can be interoperable without going through a Switching Institution.
Parties connected with NPG shall comply with and implement the Standards established by BI and managed by the Standards Institution and shall also comply with the conditions set by the Services Institution.
Switching institution:
- Has the duty and function to process the payment transaction data domestically for
interconnection and interoperability.
- Must previously obtained a license as switching provider from BI;
- Must have a minimum paid up capital of IDR50billion
Standard Institution:
- Has the functions of preparing, developing, and managing the Standards (the formalized technical and operational specifications) for the interconnection and
interoperability of payment instruments, payment channels, and Switching, as well as security. - Must be an Indonesian legal entity
that obtain a stipulation from BI as the Standard Institution
NPG
shall be systems which consist of
standards, switchings, and
services which are constructed
through a set of regulations and
mechanisms (arrangements) to
integrate various payment
instruments and channels
nationally.
c. theinteroperability of payment instruments in
the forms of ATM cards and/or debit cards, credit
cards, electronic money, and other payment
instruments NPG covers domestic
payment transactions which comprise:
A. interconnection
of Switching;
b. the
interconnection and interoperability of payment channels in the forms of ATM, electronic data captured (EDC),
agents, payment gateways, and other payment channels; and
