Indonesia’s Payment Processors Must Disclose New Payment Rails Amid Regulatory Uncertainty

JAKARTA, Indonesia - The Bank of Indonesia (BI) has issued a directive requiring payment processors in the country to provide detailed information about their new payment rails, sparking concerns over regulatory uncertainty.

Disclosure Requirements

According to BI, payment processors must submit their plans for the new payment rails, which will be reviewed by the central bank. The regulator may then decide whether the new payment rails can be used in Indonesia, pending the issuance of a new regulation or policy. Alternatively, BI may require payment processors to obtain a licence based on existing regulations or order them to stop using the new payment rails.

Regulatory Framework

The move is aimed at ensuring that payment processors comply with the country’s financial regulatory framework and maintain stability in the payments industry.

Cross-Border Payments and Remittances

In related news, BI has announced that cross-border payments and remittances fall under its supervision. Non-bank entities must obtain a remittance licence as a Category-3 payment service provider, while banks are not required to obtain a separate licence but must still comply with reporting requirements.

Reporting Requirements

The central bank has also stipulated an upper limit for cross-border remittances by non-bank entities and requires both banks and non-bank entities to comply with reporting requirements set out by the Financial Services Authority (OJK).

Fund Administrators

Fund administrators in Indonesia are not subject to specific regulations, although they must comply with existing laws and regulations applicable to their sector.

Trading Platforms

The use of trading platforms for securities, futures commodities, and money markets is regulated differently depending on the asset class. Securities trading falls under the supervision of OJK, while futures commodities fall under the supervision of Bappebti.

Cryptocurrency Exchanges

Meanwhile, the emergence of cryptocurrency exchanges has led to a legal framework being issued by the government, recognizing cryptocurrencies as crypto-assets that can only be traded as futures commodities at approved exchanges.

Conclusion

As the payment industry continues to evolve in Indonesia, players must navigate a complex regulatory landscape to ensure compliance with financial regulations and maintain stability in the market. The requirement for payment processors to disclose new payment rails adds another layer of complexity, highlighting the need for careful planning and consultation with regulators.