Bank Indonesia Opts to Reform the Payment System Regulation, Here are the Implementation Details

By Anita Ratnaningsih | Mar 15 2021 11:15

The payment system landscape continues to evolve in parallel with the rapid advancement of technological innovation. Therefore, Bank of Indonesia (BI) as a regulator needs to ensure that every activity conducted within the payment system corridor in Indonesia is properly aligned with the stipulated regulations. In order to create a secure payment system, as well as to drive and support its thriving growth, BI endeavors a reform on the Indonesia’s payment system industry by releasing a Bank Indonesia Regulation No. 22/23/PBI/2020 (Payment System PBI), which is a new regulatory legal protection overseeing the payment system implementation in Indonesia.


As part of the manifestation of the 2025 Indonesian Payment System Blueprint (BSPI), the new Payment System PBI framework will be administered to strengthen the regulations regarding access to the domestic payment system operations, as well as to cover any activities within our payment ecosystem in a comprehensive manner. Additionally, this ‘umbrella’ regulation will shift its focus on activity and risk-based approach, instead of an entity-based approach - hence allowing BI to efficiently mitigate any risks that might possibly occur in the payment system.


The regulatory principles stipulated in the Payment System PBI outline the vision of the Indonesian payment system, the authority of BI in the Indonesian payment system landscape, the purpose and the scope of payment system operation, as well as payment system components, among others.


Payment Service Provider (PJP) and Payment System Infrastructure Provider (PIP)

The new PBI Payment System regulation classifies The Service Providers into two major groups: Payment Service Provider (PJP) and Payment System Infrastructure Provider (PIP). Firstly, PJP acts as the Front-End system provider which comprises the Issuer, Acquirer, Payment Gateway, e-Wallet, and Fund Transfer platform providers. There are four types of business activities involved; namely Account Issuance Services (AIS), Payment Initiation and/or Acquiring Services (PIAS), Account Information Services (AInS), and Remittance Service.

These activities will determine the entry licenses, which are substantially categorized into 3 types:

  • PJP Category One License

Refers to those who conduct all activities including AIS, PIAS, AinS, and Remittance. The minimum paid-up capital to deposit for this category is Rp 15 billion.

  • PJP Category Two License

Refers to those who conduct AIS and PIAS. The minimum paid-up capital to deposit for this category is Rp 5 billion.

  • PJP Category Three License


Refers to those who conduct Remittance and other services. For PJP who doesn’t provide a system to other operators, the minimum paid-up capital it has to deposit is Rp 500 million. For PJP who provides a system to other operators, the minimum paid-up capital it has to deposit is Rp 1 billion.


The second Service Provider, PIP, acts as a Back-End system provider which consists of Principal, Switching Provider, Clearing Provider, and Dispute Provider. PIP conducts certain activities involving the settlement, clearing, and dispute for PIP’s members. Due to this requirement, PIP therefore needs to comply with the Entry and PIP appointments. The Paid-up capital requirement that needs to be fulfilled by the PIP is a minimum of Rp100 billion. For PIP that is a Foreign Principal, a Grandfathering rule applies with a letter of Guarantee required.


BI designates three Supervision & Assessment categories that are applicable to all Service Providers, based on an institution’s size, interconnectivity, complexity and substitutability: Penyelenggara Sistem Pembayaran Sistemik (PSPS), Penyelengara Sistem Pembayaran Kritikal (PSPK), and Penyelenggara Sistem Pembayaran Umum (PSPU) - the aforementioned classification will determine the capital obligation of the PJP and PIP.  


The new regulation will commence on July 1, 2021. Eventually, its implementation will hopefully support the creation of a payment ecosystem that is both safer and more reliable.


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