27 June 2024

The Continuity of Bank Indonesia's Regulatory Blueprint on Payment System

Bank Indonesia enacted two new regulations as a follow up to its revamp of payment system industry: No. 23/6/PBI/2021 and No. 23/7/PBI/2021.

| Rizki Karim & Raitama Prasetyo


In July 2021, Bank Indonesia enacted two new regulations: Bank Indonesia Regulation No. 23/6/PBI/2021 on Payment System Providers (“PJP Regulation”); and Bank Indonesia Regulation No. 23/7/PBI/2021 on Payment System Infrastructure Operators (“PIP Regulation”). This is part of Bank Indonesia's and the Government’s program of establishing a revamped regulatory framework for the payment system industry. The impetus of this program commenced in 2020, when Bank Indonesia enacted the umbrella regulation, Regulation No. 22/23/PBI/2020 on Payment System ("Payment System Regulation").


Payment System Regulation

As an umbrella regulation, the Payment System Regulation aimed to enact a major overhaul of the payment licensing framework in Indonesia to correspond with the continually developing digital economy industry. Although it was issued in 2020, the Payment System Regulation only became effective 1 July 2021.

The regulation classifies Payment System Providers into two broad categories: Payment Service Providers (“PJP”) and Payment System Infrastructure Providers (“PIP”). PJP is essentially a new category that refers to the previous category of payment companies that were conducting e-money, e-wallet, payment gateway, and funds transfer activities; whereas PIP now refers to the clearing and settlement services providers. This is a fresh introduction compared with the framework of the previous regulations, and can be summarized as follows:


Facilitating payment transactions




Operate payment system infrastructure

(1) Provision of information on source of funds


(1) Clearing services

(2) Initiation of payment and/or acquiring services


(2) Settlement services

(3) Management of source of funds



(4) Remittance services




The Payment System Regulation also introduces a new ownership and control regulation applicable to PJP and PIP. In short, the regulation aims to promote domestic involvement with respect to ownership and, more particularly, control, over payment system companies.

For PJP, while foreign parties may own up to 85% of the total shares, 51% of the shares with voting rights must be owned by domestic parties. Moreover, any shares with special rights, such as the right to nominate directors or commissioners must also be owned by the domestic parties. This means that while foreign parties can still equitably own the majority of the shares of a PJP, the control over the company has to be possessed by domestic interests.

In respect to PIP, minimum 80% of total shares and shares with voting rights must be owned by the domestic parties.


PJP Regulation

PJP Regulation delves deeper into the licensing mechanism for PJP. Licensing now will be provided based on bundled categories, classified as follows:

Category I

(Minimum capital IDR 15 billion)

Category II

(Minimum capital IDR 5 billion)

Category III

(Minimum capital IDR 500 million)

(1) Provision of information on source of funds

(1) Provision of information on source of funds

(1) Remittance services

(2) Initiation of payment and/or acquiring services

(2) Initiation of payment and/or acquiring services

(2) other services determined by Bank Indonesia

(3) administration of source of funds



(4) Remittance services




The PJP regulation also streamlines the licensing application process for PJP applicants. In summary, the steps for obtaining a license for PJP are as follows:

  1. Pre-submission phase – which includes pre-consultative meeting, consultative meeting, and/or coaching clinic. All are meant to assist applicants in gathering and preparing all licensing requirements.
  2. Administrative and Substantive evaluation – Bank Indonesia will examine application to ensure all of the requirements have been met by applicant.
  3. On-site visit – if deemed necessary.

Bank Indonesia will determine whether the application is successful or not. In the event an application is successful, the applicant must commence its activity within 120 days following Bank Indonesia’s approval. In the event an application is not successful, the applicant may re-submit a revised application after 180 days.

It should be noted that the above process is applicable only for companies that are about to apply for a PJP license. Companies that already possess such a license under the previous regime may convert their license into PJP, following an examination by Bank Indonesia.


PIP Regulation

The PIP Regulation, meanwhile, covers the licensing of PIP entities. Unlike PJPs, that must apply to Bank Indonesia to obtain their licenses, PIPs are appointed by Bank Indonesia.

PIPs may carry out two activities:

  1. Clearing services, including reconciliation, confirmation, and calculation of PIP members' rights and obligations prior to the settlement process; and/or
  2. Settlement services, including execution of settlements, which are final and binding, by debiting and crediting the members’ accounts based on the clearing process.

There are 3 classifications of PIP, as determined by Bank Indonesia, as follows:



Systemic Payment System Provider

PIPs that have a systemic effect on Payment System in case of any failure or disruption




Critical Payment System Provider

PIPs that have a critical effect on Payment System in case of any failure or disruption




General Payment System Provider

PIPs that have no significant effect in case of any failure or disruption


Bank Indonesia determines the classification of a PIP based on its size, interconnectivity, complexity, and replaceability.


Moving Forward

The framework established by the Payment System Regulation, PJP Regulation, and PIP Regulation, has simultaneously revoked Bank Indonesia Regulation No. 18/9/PBI/2016 on Regulation and Supervision of Payment System and Rupiah Currency Management as well as the Part on Licensing in respect to Bank Indonesia Regulation No. 14/23/PBI/2012 on Money Transfer. Moreover, the new regulations in effect also alter the framework   previously set in these regulations:

  1. Bank Indonesia Regulation No. 11/11/PBI/2002 on Operation of Card-Based Payment Instrument and its amendments;
  2. Bank Indonesia Regulation No. 18/40/PBI/2016 on Payment Transaction Processing;
  3. Bank Indonesia Regulation No.19/12/PBI/2017 on Operation of Financial Technology; and
  4. Bank Indonesia Regulation No. 20/6/PBI/2018 on Electronic Money.

It must be noted that those regulations referred to above – as well as any of their implementing regulations – remain normatively still in effect, but are only applicable to the extent that they conform with the new regulations.


Disclaimer: The content above is intended to provide a general guide to the subject matter, and should not be treated as legal advice. For more information on the subject matter or assistance in obtaining the aforementioned licenses, please feel free to contact KarimSyah Law Firm at or

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