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The Differences between E-money and E-wallet

“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.[1]

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:

 Legal BasisDefinition
E-moneyBank 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-walletBank 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:

E-money Operators
The Issuer, Acquirer, Principal, Switching Operator, Clearance Operator, and Final Settlement Operator in e-money activitiesApply 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 IssuerApply 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:

  1. 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.
  2. Provide refund procedures concerning the cancellation of the payment transaction.
  3. Ensure the funds used in e-wallet are purposed on payment.
  4. Fulfill the limitation of amounts that hold in an e-wallet, maximum IDR10 Million (SEBI 18/2016).
  5. All funds that kept in e-wallet must be placed in the form of security and liquidity assets.
  6.  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:

+62- 21 50806536  | +62 – 811 877 216 |  info@gaffarcolaw.com | www.gaffarcolaw.com


[1] money.kompas.com/read/2019/04/02/125732326/uang-elektronik-kian-populer-apa-sebabnya?page=all, accessed on 5 June 2020, 9.19 AM

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