Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.
Indonesia's central bank, Bank Indonesia (“BI“), has issued several regulations that reform the legal framework for payment systems in Indonesia.
BI Regulation No. 22/23/PBI/2020 concerning Payment Systems (“BI Reg 22/2020“), issued on July 1, 2021, is an umbrella regulation that reclassifies payment system providers into:
Following these changes, the central bank issued BI Regulation No. 23/6/PBI/2021 concerning Payment System Providers (“BI Reg 23/2021“) as an implementing regulation specifically in regard to PJP.
The key provisions of BI Reg 23/2021 are as follows:
Main Business Activity
Article 2 of BI Reg 23/2021 provides that the main activities of PJP include the provision of information on sources of funds; payment initiation and acquiring services; administering sources of funds; and remittance services.
PJP License
BI further stipulates the type of license required for the specific business activities of PJP, along with the minimum paid-up capital and other requirements for each license. Note that BI may amend the minimum required paid-up capital to support national economic and financial policy, maintain national efficiency, safeguard the interests of the public, maintain growth in the industry, and/or support fair business competition
Type of License
Scope of Activities
Specific Requirements
License Category 1
License Category 2
License Category 3
BI Reg 23/2021 also sets out other requirements for a non-bank PJP, including:
BI will take a maximum 220 working days from the submission of the license application to process such application. The validity period of each license will be determined by BI in accordance with the PJP's license category, business activities and source of funds it processes.
Classification of PJP
BI Reg 23/2021 also classifies PJP into:
BI will determine which classification the relevant PJP shall fall into based on the PJP's size, connectivity, complexity and irreplaceability. This classification may affect the relevant PJP's duty to fulfill certain obligations related to capital, risk management and information system, among other things.
Risk-Based Classification and Approval for Activity/Product Development, Cooperation
PJP must report or obtain BI approval for the following:
Such developments and cooperation are divided by risk classification, as follows:
Risk Classification
Development/Cooperation
Report to / Approval from BI
Low Risk
1. Development of activities/products that affect the pre- and/or post-transaction phase and only includes enhancement of the current system/infrastructure.
2. Cooperation with Indonesian parties without development of activities/products.
PJP must report to BI
License Category 2
1. Development of activities/products that affects:
a. initiation, authorization, clearance and/or final settlement phase in the form of enhancement of the current system/ infrastructure;
b. pre- and/or post-transaction phase in the form of development of transaction security features, cross-border development, and/or usage of new system/infrastructure.
2. Development of activities/products alongside cooperation that affects the pre- and/or post- transaction phase and the provision of information technology solutions and/or technical services by other parties that impact the PJP's business sustainability; or
3. Cooperation with Indonesian parties without development of activities/products.
PJP must obtain approval from BI
License Category 3
1. Development of activities/products that affects the initiation, authorization, clearance and/or final settlement phase in the form of changing the transaction security features, cross-border activities/product development, and/or the use of a new system/infrastructure; or
2. Development of activities/products alongside cooperation that affects initiation, authorization, clearance and/or final settlement phase and the provision of information technology solutions and/or technical services by other parties that impact the PJP's business sustainability.
PJP must obtain approval from BI
Any PJP must first self-assess the risk classification of its development and/or cooperation plan, which will then be further assessed by BI upon submission.
Transitional Provisions
Any payment system provider licenses issued before July 1, 2021, i.e., the effective date of BI Reg 23/2021, must be converted to a PJP License according to BI Reg 23/2021. This conversion will be based on BI's evaluation of the license, which will be conducted within:
BI will not enforce the shareholder structure or control requirements on payment system providers that already held a business license prior to the enactment of BI Reg 23/2021, as long as there are no changes to the shareholder composition or shareholder control by foreign parties after the enactment of BI Reg 23/2021, with the exception of such changes made under the policy of or as a supervisory follow-up by BI. (4 March 2022)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
© Mondaq® Ltd 1994 – 2022. All Rights Reserved.
Forgot your password?
Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms
Articles tailored to your interests and optional alerts about important changes
Receive priority invitations to relevant webinars and events
You’ll only need to do it once, and readership information is just for authors and is never sold to third parties.
We need this to enable us to match you with other users from the same organisation. It is also part of the information that we share to our content providers (“Contributors”) who contribute Content for free for your use.