New Payment System PBI by Bank Indonesia: Restructuring the Regulatory Framework of Indonesia’s Payment SystemsBy Anita Ratnaningsih | Feb 15 2021 23:15
The swift development of information technology continues to generate various innovations, including in the field of payment system industry. To support its operational aspect, Bank of Indonesia (BI) releases a new regulatory legal protection, addressing specifically about the payment system implementation in Indonesia through the issuance of Bank Indonesia Regulation No. 22/23/PBI/2020 (Payment System PBI). The new regulatory framework is planned to take effect this year, precisely on July 1, 2021, as part of the manifestation of the 2025 Indonesian Payment System Blueprint (BSPI).
It is evident how the digitalization trend that also concurrently transpires in the payment system industry comes with its own complexity of risks and demands. As the regulator, BI needs to uphold and enforce a system policy that will be able to equate the digital innovation trend and risk mitigation. This way, the payment industry won’t experience opportunity losses, and the financial system stability will not be disrupted by the emerging risks.
Quoting the statement of Head of BI Payment System and Policy Department, Filianingsih Hendarta, the new Payment System PBI regulation is designed based on an activity and risk-based approach, replacing the previously implemented institution-based approach. Additionally, it also prioritizes principle-based regulations or basic rules, not the detailed rules.
The newly-issued Payment System PBI details the Indonesian payment system and its visions, purposes, scope of operations, and components. It also defines the authority of BI in the Indonesian payment system landscape, and how the Payment System PBI will be improved with a configuration approach that upholds principle-based regulations and an optimized role of the Self-Regulatory Organization (SRO).
“We believe this regulatory reform will positively impact the innovation of all financial institutions activities pertaining to the PJP and PIP,” said Patricco Baron, the Chief Technology Officer of ALTO Network. “Implementation of the new Payment System PBI will create a thriving payment ecosystem that is aligned with the growth of financial digitalization sector. As one of the national switching providers in Indonesia, ALTO will always support and comply with the newly stipulated regulations.”
When the new Payment System PBI effectively starts in July 2021, all provisions of the laws and regulations detailing the payment system will be declared to remain valid, as long as they do not contradict the provisions specified in the regulation.