“Bank Indonesia specifies e-money and e-wallet under the different regulations, aside from its commonly purposed in payment and technology prioritization.”
In March 2019, Indonesia Central Bank (Bank Indonesia) had revealed a significant increase in non-cash payments with electronic money utilization, which meets its growth of 66,6 percent in 2019. Bank Indonesia has mentioned the use of electronic money (“e-money”) in Indonesia became popular, especially for transportation payment and e-commerce.
In line with the popularity of electronic money, Bank Indonesia has provided the framework and licensing for the payment services’ operators in financial technology scope, including e-money and electronic wallet (“e-wallet”). Bank Indonesia specifies e-money and e-wallet under the different regulations, aside from its commonly purposed in payment and technology prioritization.
The Differences on Definition and Legal Basis
The differences elaborated in the following table:
|E-money||Bank Indonesia Regulation No. 20/6/PBI 2018 on Electronic Money. (“PBI 20/2018”) Bank Indonesia Circular Letter Number 16/11/DKSP of 22 July 2014 on Organization of Electronic Money. (“SEBI 16/2014”) Bank Indonesia Circular Letter Number 18/21/DKSP of 27 September 2016 on the amendment of SEBI 16/2014. (“SEBI 18/2016”)||Payment instrument that fulfills the following criteria: Issued based on nominal of money that topped up first to the issuer. Nominal of money was kept electronically within a server media or chip.Nominal of electronic money managed by the issuer are not as savings, which referred to banking regulation. (Article 1 number 3 PBI 20/2018)|
|E-wallet||Bank Indonesia Regulation No. 18/40/PBI/2016 on Organization of Payment Transaction Process. (“PBI 18/2016”) Bank Indonesia Circular Letter No. 18/41/DKSP of 30 December 2016 on Organization of Payment Transaction Process. (“SEBI 18/2016”)||Electronic service to keep the payment instrument’s data, which are card payment instruments (debit and credit card) and/or electronic money, can hold funds for payment purposes. (Article 1 number 7 PBI 18/2016)|
E-money and E-wallet’s Operators Responsibilities
According to PBI 20/2018, e-money operators are consists of Issuer, Acquirer, Principal, Switching Operator, Clearance Operator, and Final Settlement Operator in e-money activities. The operators’ responsibilities concise in the following table:
|The Issuer, Acquirer, Principal, Switching Operator, Clearance Operator, and Final Settlement Operator in e-money activities||Apply management risk effectively and consistently.Apply information system security standards. As for issuer, including 2 (two) factor authentication e-money that has amount above IDR2 Million. Fulfill the obligation of the domestic e-money transaction process.Perform interconnection and interoperability.Convey the periodically report (daily, monthly, quarterly, yearly, audit report) and incidental report to Bank Indonesia.|
|Specifically for Issuer||Apply anti-money laundering and counter financing of terrorism principles.Apply consumer protection principle, including limitation of demand and utilization of user’s data, top-up infrastructure, and financial loss compensation to users, which not caused by users’ fault or negligence. Provided limited amounts of amounts that kept in e-money, limited transaction amount for 1 (one) months, and e-money features.Recording and placement of float funds. Increase the paid-up capital, according to the number of float funds|
As different from e-money, PBI 18/2016 only classified e-wallet as a single operator (e-wallet’s operator). The responsibilities of the e-wallet operator are as follows:
- Implement management risk effectively and consistently, implement information system security standards, perform on the domestic transaction process, perform consumer protection, and apply anti-money laundering and counter-financing terrorism programs.
- Provide refund procedures concerning the cancellation of the payment transaction.
- Ensure the funds used in e-wallet are purposed on payment.
- Fulfill the limitation of amounts that hold in an e-wallet, maximum IDR10 Million (SEBI 18/2016).
- All funds that kept in e-wallet must be placed in the form of security and liquidity assets.
- Convey the periodically report (daily, monthly, quarterly, yearly, audit report) and incidental report to Bank Indonesia.
Purposes of Money/Funds in E-money and E-wallet
According to the definition above, both e-money and e-wallet are purposes of payment activities. E-money serves as a payment instrument. Meanwhile, e-wallet is an electronic service that could keep the payment instruments as cards and e-money for payment purposes.
One of the general descriptions of one of the registered e-wallets in Bank Indonesia is Yap! by PT Bank Negara Indonesia (Persero), Tbk. Yap!’s users could register their BNI debit, credit card, and UnikQu (e-money). Users could choose funds sources to make a payment; for example, if they use a debit card, then the payment source made directly from their savings account.
For the other registered e-wallet, Dana by PT Espay Debit Indonesia Koe was also registered as an e-money issuer. Dana’s application is allowing users to experience the e-money features or make a payment using their registered debit or credit card. The e-money features consisted of purchasing payment, bill payments, funds transfer, and cash withdrawal, as stipulated in PBI 20/2018.
Licensing for E-money and E-wallet’s Operators
Based on PBI 20/2018, the licenses from Bank Indonesia are required for e-money operators with open-loop type, and the total amount of float funds are more than IDR1 Billion. Moreover, e-wallet operators required the licenses when active users reach or planned for a minimum of 300,000 (three hundred thousand) users.
For both e-money and e-wallet’s operators, the licensing procedure is conducting through e-Licensing Bank Indonesia (https://www.bi.go.id/elicensing). However, the requirements are different such as capital requirements and feasibility aspects.
In general, the licensing procedures are as follows: (1) Documents submission through e-Licensing Bank Indonesia (2) Documents checking, (3) Hardcopy documents verification (4) On-site Visit, and (5) Approval/rejection of license.
Author: Kristalia Andiani Puteri
Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas include capital market and financial services.
For further queries and information, please contact us:
 money.kompas.com/read/2019/04/02/125732326/uang-elektronik-kian-populer-apa-sebabnya?page=all, accessed on 5 June 2020, 9.19 AM