Digital Payment Security Threats in Indonesia on the Rise as Transactions Grow
As more Indonesians turn to digital wallets for convenience, cybercriminals are increasingly targeting both customers and service providers. According to Bank Indonesia (BI), the value of transactions using electronic money grew by 9.88 percent in March 2023 compared to the same period last year, reaching IDR 1,944.1 trillion.
Digital Wallets: The New Normal
Edwin Lim, Fortinet’s country director for Indonesia, citing a McKinsey report, said that digital wallets have become the leading e-commerce payment method in the country, accounting for almost 39 percent of transaction value last year. However, this growth comes with risks, as cybercriminals are finding new ways to exploit vulnerabilities.
Cybercrime on the Rise
Cybercrime against digital wallets is on the rise, with hackers targeting personal data and selling it online. They may also hide malware in promotions or warning emails, using trusted names or links on websites to deceive users. A recent study by Nagari Law Review found that there has been an increase in the crime of breaking into digital wallet accounts in Indonesia since the Covid-19 outbreak.
High-Profile Cases
Examples of high-profile cases include:
- BRI Life
- Bukalapak
- Shopback
- Redmart
In one notable case, 252 GB of data containing 463,519 documents was leaked, including information on account mutations, proof of insurance deposit transfer, ID cards, and screenshots of customer WhatsApp conversations with BRI Life employees.
Economic Losses
The National Cyber and Encryption Agency (BSSN) estimated that economic losses from cyberattacks in 2021 totaled a whopping IDR 14.2 trillion (US$957 million). The country’s digital economy is forecasted to hit the US$130 billion mark by 2025, driven primarily by e-commerce.
Challenges
The problem of cyberattacks related to digital wallets in Indonesia is not only significant in terms of potential financial losses but also poses a risk to the overall development of the country’s e-commerce and digital payment industry. The primary challenges facing Indonesia in transitioning to a cashless society are:
- Infrastructural issues
- User security
Strategy for Indonesian Payment System
BI has developed a strategy for the Indonesian payment system, including five visions supporting the integration of national digital economies and finance, ensuring a balance between fintech, banks, and consumer protection, as well as stability among fair business competition. The agency is also coordinating with:
- Payment System Association (ASPI)
- Payment system infrastructure providers
- PT Penyelesaian Transaksi Elektronik (PTEN)
to investigate the risk of digital wallet leaks.
Regulations for Digital Wallet Security
To reduce the occurrence of incidents that affect digital wallet users, specific regulations must be implemented to address the security concerns. With the growth of digital transactions in Indonesia, it is crucial for customers and service providers to remain vigilant against cybercriminals and take steps to protect their online activities.