Payment System Security Risks Exposed in Indonesia

Experts Warn of Growing Threats as Digitalization Continues

Indonesia’s efforts to digitalize its retail payment systems have exposed growing security risks that could put consumers’ financial data at risk. Despite regulations and guidelines implemented by the country’s central bank, Bank Indonesia, fraud trends in electronic transactions remain a major concern.

Common Forms of Cybercrime

• Malware: Malicious software designed to gain access to customer’s internet banking or damage a computer without their knowledge.
  • Detection: Use latest anti-virus software and keep patches up-to-date.
• Phishing: Cybercriminals pretending to be Bank Indonesia’s official sites to acquire customers’ data, including passwords, usernames, security codes, and credit card details.
  • Prevention: Ensure URL is secured (https) and in accordance with Bank Indonesia’s official sites when accessing internet banking.

Challenges Facing Indonesia’s Retail Payment System

• Lack of Interoperability: Disintegrated billing systems and limited access to financial inclusion, particularly in remote areas.
• Growth of Electronic Retail Transactions: Driven by demand-side policies and supply-side competition, which has created new opportunities for fraudsters.

Bank Indonesia’s Strategies to Address Challenges

• Electronification of Payment Systems: Using telecommunications devices to improve payment systems.
• Development of Electronic Bill Presentments and Payments (EBPP): Supporting bulk settlements processing.
• Improving Interoperability: Between e-money and card payments.

Regulations and Guidelines for Retail Payments

• Risk Management: Regulated parties must adhere to strict guidelines on risk management, information technology security, prudence principles, standardization, consumer protection, reports, and oversight.
• Regulated Parties:
  • Principals
  • Issuers
  • Acquirers
  • Clearing providers
  • Settlement providers
  • Fund transfer providers
  • E-money operators

Experts’ Advice for Consumers

• Vigilance: Be aware of the risks involved in online transactions and take steps to protect yourself from cybercrime.
• Reporting Suspicious Activity: Report any suspicious activity to your bank’s call center immediately.

With the growth of electronic retail transactions in Indonesia, it is essential that consumers are aware of the risks involved and take steps to protect themselves from cybercrime.