digital payment in indonesia - pembayaran digital
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ROLLING OUT DIGITAL PAYMENT PLATFORMS -An Indonesian Perspective
17th Annual Cards & Payments Asia25 – 27th April 2012
Singapore
Heru Sutadi
ICT STATISTICS
Until the end 2011, the status of ICT infrastructure and services are as follows:
Fixed line subscribers (PSTN): 8.328.180 subs(3.49 %)
Fixed Wireless Access: 32.819.564 subs(13.81 %)
Mobile: 213.256.931 subs
(89.79 %)
Internet users: 72 Millions(30,31 %)
2
Digital Money Mobile financial services was first
implemented in 2001 by Mobipay in Spain, while mobile banking service has been given for years in some countries
Mobile money becomes the focus of attention because of this phenomenon a success in several developing countries
Predicted until the end of 2013 more than 424 million mobile phone users will send money to other mobile phone users in the same country and 73 million will be sending money to another country
There are three main types of financial services: mobile money transfer, mobile banking and mobile payment
CURRENT MARKET CHALLENGES
Although the market is well established, there are a number of barriers currently restricting it from reaching its full potential and fulfilling the basic consumer needs: Access Security Cost Regulation.
BUSINESS MODELS
IMPLEMENTATION
Compared to the bearer business model, mobile operators who want to cooperate with financial institutions whilst being present at the customer interface (cash in/out) are more dependent on the regulatory environment of their respective country.
If the agency rules prevent them to handle cash and undertake the customer due diligence procedures for AML/CFT prevention, then they may not be able to choose the business models.
FINANCIAL REGULATION
The first level of financial regulation is AML/CFT compliance, which generally becomes applicable when the mobile operator becomes involved in cash handling at the consumer interface.
The next level of regulation applying to mobile operators is prudential regulation. Prudential regulation becomes applicable when risks increase for the involvement of the mobile operator in the financial transaction, for consumers and for the wider financial system.
PRUDENTIAL REGULATION
Prudential regulation ensures that regulated entities are financially sound and promotes their prudent behavior.
The key aim of prudential regulation is protecting the interests of consumers and the quality of an institution’s systems for identifying, measuring and managing the various risks in its business.
Prudential regulation can apply in various measures depending on the risks.
MOBILE OPERATOR PERSPECTIVEFrom a mobile operator perspective following
thresholds of prudential rules depending on the risks involved seem useful: Payment regulation (low risk – light prudential rules)
E-money (medium risk – medium heavy prudential rules)
Deposit taking, i.e. banking (high risk – heavy prudential rules)
However much such a risk-based approach would be desired, it is not the rule, and in many countries banking regulation applies to the majority of financial services offered independently of the risks involved.
BENEFIT TO MOBILE OPERATORNew customer acquisition (individual, corporate)
Non-traditional Telco revenues Transaction fees Share of Forex spread Finders/consumer sign-up fees Future m-banking revenue (e.g. utility bill payments)
Increase in ARPU
Reduced churn (e.g. one operator reduced churn from 3% to 0.5% per month)
Meets government service obligations and CSR Agendas
Opportunity to up-sell (e.g. mobile content, prepaid to post paid)
MOBILE OPERATOR SITUATIONS
From a mobile operator perspective agency rules become relevant with regard to two situations:
1. Can the mobile operator become an agent? • Becoming an agent allows the mobile operator to
use its own distribution chain to accept/disburse cash at both ends of the MMT service.
2. Can a mobile operator operating a payment service or e-money use other retailers as agents for MMT services?
Telekomunikasi
Internet / Multimedia
Penyiaran
ANALOG
UU 36/199Telekomunik
asi
UU 32/2002Penyiaran
UU 11/2008ITE
Old Law & Regulatory
DIGITAL
DIGITALWAVES
RUUKonvergensi Telematika
RUU perubahanPenyiaran
RUU perubahan
ITE
RUU TIPITI
New Law & Regulatory
Regulatory old model
Regulatory new model
TVVoice
InternetSatellite TV
VOD
Telecommunication Broadcasting
Cable TV
IP-TV
Mobile services
Interactive TV
Financial ServicesEntertainment
Game
Music
ICT Act & Reg
Toward a Less cash society Grand design
E money – prepaid card as stated at the PBI no 7/52/PBI/2005 concerning the Card Payment Instrument Operational Activity
Definition: Prepaid product /e-money : stored-value or prepaid
products in which a record of the funds or value available to a consumer is stored on an electronic device in the consumer’s possesion
Access Product (debet card and credit card)
PBI : Peraturan Bank Indonesia / Indonesia Central Bank Rule
DIGITAL MONEY IN INDONESIA
Some operators provide M-Money services:
International remittances which are targeted by Indonesian workers who were working in foreign countries who wish to transfer money to families in Indonesia
Mobile banking services. Some banks have been working with telco operators to include this services as basic services commensurate with the services ringtones, wallpapers or service information and content
Payments also begin to move since taking over two years ago, with the term e-wallet.
Telco Co
103,709 104,935
108,898 112,076
348,587
482,236 503,267
513,511
531,557
604,754
630,287 728,171
-
200,000
400,000
600,000
800,000
Telkomsel Cash User (t-cash)
CASE STUDY (1)
Merchant Category %Retail 94.0%Fashion/ Life style 1.2%Bill Payment 0.1%Education & University 0.4%Food and beverage 0.8%Insurance 0.0%Portal 0.1%Cellular Shop 0.5%Telkomsel Channel 1.1%Others 1.6%
Features :
1.Cash in
2.Purchase
3.Online Purchase
4.Bill Payment
5.P2P Transfer
6.Cash Out
Number of partners : over 150 companies
CASE STUDY (2)
E-CHANNEL GROWTH
TECHNOLOGY TRENDTECHNOLOGY TREND
INTERNET BANKING TRX VOLUME - 1
TransferBNI Credit Card
PaymentNon BNI Credit Card Payment
2009 7.471.188.170,0 126.366.829,8 95.067.169,9 2008 4.129.695.799,0 76.388.869,6 59.453.536,3 2007 990.027.501,4 18.488.879,3 9.690.978,3
INTERNET BANKING TRX VOLUME
INTERNET BANKING TRX
TransferBNI Credit Card
PaymentNon BNI Credit Card Payment
2009 1.612.093,0 68.617,0 44.574,0 2008 978.219,0 43.981,0 31.224,0 2007 276.995,0 14.835,0 6.644,0
Source : BNI 46
Bank /E-
channel
ATM Internet Banking
SMS Banking
Mobile Banking
Phone Banking
BNI BNI ATM BNI Internet Banking
BNI SMS Banking
In construction
BNI Phone Plus
BCA ATM BCA KLIK BCA SMS BCA M BCA BCA By Phone
MANDIRI MANDIRI ATM MANDIRI Internet Banking
MANDIRI SMS Banking
- MANDIRI Call
BRI BRI ATM BRI Internet Banking
BRI SMS Banking
BRI Mobile Banking
BRI Call
DANAMON
ATM DANAMON DANAMON On Line Banking
- DANAMON Mobile Banking
DANAMON Acces Center
CIMB-NIAGA
ATM NIAGA Internet Banking NIAGA
- - NIAGA Call Center
BII ATM BII Internet Banking BII
- - NIAGA Call Center
PERMATA PERMATA ATMPERMATA Mini ATM
PERMATANET PERMATA Mobile
PERMATA Mobile
PERMATATEL
2010 INTER BANK e – banking Map in Indonesia
e-Channel Transaction
MANDIRI BCA BNI
2009 2010 2009 2010 2009 2010INTERNET BANKING > VOL TRX ( Million) 6.1 26.6 97.5 177.7 0.84 1.2 > VALUE TRX ( IDR Trillion) 3.8 8.7 591.0 873.0 3.5 5.1 ATM > VOL TRX ( Million) 122.9 141.9 412.8 436.2 - 166.2 > VALUE TRX ( IDR Trillion) 77.1 97.1 412.0 447.7 - 85.4 SMS/MOBILE BANKING > VOL TRX ( Million) 33.5 41.7 54 77.6 10.5 18.3> VALUE TRX ( IDR Trillion) 1.3 2.6 59.2 90.6 0.787 1.5
E – banking transaction Juny 2009 – 2010 in Indonesia
Source : Infobank Sep 2010
Nominal “Payment “ of the Internet Banking 2007 - 2009 - BNI
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Telkom Telkomsel (Halo)
Indosat Exelcomindo
PLN Tiket Penerba
ngan
Biaya Pendidik
an
Personal Loan
ZIS dan Qurban
2009 20.589 24.848 3.664 2.209 3.445 21.840 40 4.389 4.021
2008 14.101 13.535 2.399 2.299 4.880 12.818 3.365 2.369 46.729
2007 4.290 4.036 750 393 1.777 915 - 376 216
2007 2008 2009
TelkomTelkomsel (Post Paid) Indosat Excelkomindo
PLN (Electricity) Airline Ticket
Education Cost Personal Loan Zakat
2009
3.489.261,55
4.544.277,77
729.644.936,0
0
421.524.575,0
0
796.962.399,0
0
61.137.694,40
7.590.733,00
5.177.783,10
1.240.800,56
2008
2.465.020,92
2.548.235,43
441.173.157,0
0
374.963.564,0
0
955.911.667,0
0
53.025.113,30
3.061.011,36
690.807,14
2.645.025,00
2007
764.322,37
852.943,58
186.424.495,0
0
66.016.179,00
351.179.601,0
0
4.406.045,00
309.005,24
36.863,72
Telkomsel - AS Indosat - IM3 Excelkomindo Mobile 8 -Fren 3 Three Flexi / Esia
2009 1.907.702.858 673.950.000 794.800.000 110.050.000 31.270.000 501.100.000
2008 1.190.650.000 422.950.000 523.165.000 77.000.000 18.110.000 413.150.000
2007 776.121.102 - - - - -
Telkomsel - AS Indosat - IM3 Excelkomindo Mobile 8 -Fren 3 Three Flexi / Esia
2009
27.962
8.388 15.287 2.128
741 12.834
2008
17.811
6.664
9.821 1.304
463 10.676
2007
12.440
-
- -
- -
Nominal “Purchasing Voucher”
“Purchasing Voucher” Transaction
Source : BNI
LAW AND REGULATION
There are several law and regulation that must be consider to provide M-Money services:
Law No. 11/2008 about Information and Electronic Transaction
Law No. 10/1998 about Banking
Law No. 25/2003 about Anti Money Laundering (including Combating Financing of Terrorism)
Indonesian Central Bank Decree No. 11/2009 about E-Money.
Bank Indonesia Regulation no 11/12/PBI/2009 concerning Electronic Money Bank or Non Bank Institution has to obtain the license from Bank
Indonesia as Principal, Issuer, Acquiere, Clearing Procsessor and /or End Settlement Processor
Entity Legal Form :Non Bank institution shall be incorporated as Limited Company that abides to the Laws of Indonesia.
Currency Usage must be Indonesian Rupiah
Enhancement of security Technology : Utilizes a reliable and secure system, Maintain and enhances Electronic Money security Technology, Possesses written standard operating procedures pertaining e-money activity, Maintain the security and confidentiality of the data.
The Limit of e-money : Rp 1,000,000.- for unregistred type of customers Rp 5,000,000.- for registered type of customers
The value of the e-money must equal with the deposit value.
Conclusion
The trend of digital money in Indonesia is increasing significantly recently. It means that this kind of business is very attractive in the very near future
The Licence is granted by Bank Indonesia to Bank and Non Bank institution to be a Principal, an Issuer, an Acquiere, a Clearing Processor and /or an End Settlement Processor
The ICT infrastructure as well as the Broadband Backbone and Broadband Access is seriosly planned by the Indonesia Government to facilitate in implementing the digital money especially m-money.
Thank you for your attention…
Heru SutadiEmail: heru@brti.or.id
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