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The New Indonesian Umbrella Regulation on Payment Systems: Key Points that Foreign Investors Should be Aware of 

by Maria Sagrado

Published: February, 2021

Submission: February, 2021


On 30 December 2020, Bank Indonesia issued Bank Indonesia Regulation No. 22/23/PBI/2020 of 2020 on Payment Systems (“Payment Systems Regulation”). The Payment Systems Regulation is intended to serve as an “umbrella” regulation that provides a regulatory framework for the Indonesian payment systems industry. This regulation will come into force on 1 July 2021.

With the increasing complexity of activities and variations in business models of payment system services providers in the market, there is a need to reform the payment systems regulations in order to optimize innovation opportunities as well as efforts to maintain financial system stability in Indonesia. This regulation changes the regulatory approach to the organization of payment systems from an institutional-based approach to an activity and risk-based approach in order to protect customers while keeping up with the rapid development of digitalization and innovation in the payment systems industry. It is expected that following the issuance of this new regulation, Bank Indonesia will issue implementing regulations of this Payment Systems Regulation which may amend the existing regulations related to payment system activities such as e-money, e-wallets, payment gateways, fund transfers, clearing, switching, credit cards, etc.

This Payment Systems Regulation has 122 Articles in 12 chapters covering various topics, including, among others, the (re)classification of payment system services providers, the licensing requirements of payment system services providers, the organization of payment systems, the sandbox for thedevelopment of payment systems technology innovation, the management of data and information, and the termination of the organization of payment system services providers. Given the broad scope of the Payment Systems Regulation, this advisory only focuses on the licensing requirements that apply to payment system services providers, particularly the new requirements regarding share ownership and control by foreign investors in the payment systems industry.

Detailed information on this matter is available on the article which can be accessed through the link provided.


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