INDONESIA Trends and Developments Contributed by: Maria Sagrado, Frederick Simanjuntak, Stephanie Kandou and Kaila Arinta Nazneen Zulkarnaen, Makarim & Taira S.
The Latest in Indonesia’s Payment Systems Indonesia’s payment system landscape has under- gone a significant transformation over the past dec- ade, driven by rapid technological adoption, regula- tory innovation, and evolving consumer preferences. The country’s shift toward digital payments has been accelerated by the government’s and Bank Indonesia’s strategic initiatives, which aim to modernise payment infrastructure, promote financial inclusion, and facili- tate payment transactions. This transformation is not just a technological change but also a socio-econom- ic movement, as digital payment adoption increasingly shapes the way businesses operate, especially small and medium-sized enterprises (SMEs), and how con- Indonesia has traditionally been a cash-driven econo- my. However, over the past five years, the country has seen a significant rise in the adoption of non-cash pay- ment methods, particularly mobile-based payments. This shift has been driven by several factors, including increasing smartphone penetration, improved inter- net connectivity, and changing consumer behaviour. Government initiatives, such as the Gerakan Nasional Non-Tunai (National Non-Cash Movement – GNNT) in 2014 by Bank Indonesia, have laid the foundation for promoting the use of electronic payments. sumers engage in daily transactions. The shift toward a cashless society One of the most significant developments in this field has been the introduction of the Quick Response Code Indonesia Standard (QRIS). Launched by Bank Indonesia in 2019, QRIS sets the national standard for Quick Response (QR) code-based payment trans- actions. In just a few years, it has become an indis- pensable part of Indonesia’s payment ecosystem, enabling interoperability between different payment service providers. The result is a more accessible pay- ment ecosystem, where consumers can use a single QR code for multiple apps and merchants can accept payments from various platforms without having to manage multiple systems. The COVID-19 pandemic further accelerated this shift. Health concerns and physical distancing meas- ures pushed both consumers and merchants to seek contactless payment solutions. This led to a surge in e-wallet usage, online banking transactions, and
cardless ATM withdrawals. The trend continues post- pandemic, as many users who shifted to digital pay- ments have not reverted to cash. By 2025, QR codes are nearly ubiquitous in payment transactions across various sectors. From shopping malls and public transportation to traditional markets and street food stalls, QR code payments are widely adopted due to their convenience and ease of use. In 2024 alone, payment transactions via QR code surged by 226.54%, with the number of users reaching 50.5 million and over 32.71 million merchants accepting QR code payments. Despite its rapid adoption, security and keeping pace with ever-evolving technology remain key challenges for QR code utilisation. Recognising this, industry players have been anticipating new regulations or guidelines from Bank Indonesia to refine the QR code regulatory framework for improving security, adapt- ability, and usability while accommodating technologi- cal advancements and market demands. Regulatory developments The payment system in Indonesia is regulated pri- marily by Bank Indonesia, which oversees payment service providers and ensures the safety, efficiency, and reliability of payment transactions. Over the last few years, Bank Indonesia has introduced a series of regulations that reflect the evolving nature of the pay- ment landscape. A key regulatory milestone was the issuance of Bank Indonesia Regulation No 23/6/PBI/2021 on Payment Service Providers (PSP), which consolidated and updated rules governing various categories of PSPs. This regulation introduced the categorisation of PSP licences into different classes based on the scope of services, such as e-wallet, payment getaway, and remittance services. The aim is to ensure that regula- tions remain proportionate to the level of risk and the scale of activities undertaken by each PSP. Another notable development is Bank Indonesia’s continued focus on interoperability and standardisa- tion. Other than QRIS, Bank Indonesia also introduced the National Payment Gateway ( Gerbang Pembayaran Nasional – GPN), which is essentially aimed at inte-
222 CHAMBERS.COM
Powered by FlippingBook