E-money itself is defined as a means of payment with money stored electronically and not managed in the usual bank savings account.
ince the issuance of a regulation in 2009, the use of e-money in Indonesia has increased significantly from its original function as a card-based payment method for public transportation or groceries to a tool to support government funding programs and e-commerce payments.
Such growth has consistently occurred as the National Non-Cash Movement, initiated by the government and Bank Indonesia (BI) in August 2014, aims to increase public awareness on the benefits of non-cash payments and supports BI in controlling money circulation.
E-money itself is defined as a means of payment with money stored electronically and not managed in the usual bank savings account. Credit for e-money can be stored either in (i) chips, where it can be utilized through a contactless mechanism without the need for a customer’s signature or the insertion of a card into a machine; or (ii) servers, where it can be accessed through mobile or web-based applications.
In regard to the development of e-money, BI has finally enacted BI Regulation (PBI) No. 20/2018 on e-money, which revokes the previous regulation, PBI No. 11/2009 as amended several times lastly by PBI No. 18/2016.
PBI No. 20/2018 was put into effect on May 4. In a nutshell, the regulation governs some fundamental points that are seen as an attempt to tailor to the market’s needs and harmonize with prevailing regulations in payment systems.
First, PBI No. 20/2018 increases the permitted amount of unregistered e-money from Rp 1 million to Rp 2 million, allowing customers to save more credits and use the e-money more frequently in their day-to-day activities.
The regulation also introduces a new e-money category called “closed loop”, where e-money is used as a payment instrument for goods or service providers that also act as an e-money issuer. This closed loop category was developed considering the rapid rise of payment instruments that are similar to e-money and used for limited purposes and the increasing amount of floating funds (i.e. the entire value of e-money is received by an e-money issuer as a result of topping up on e-money), such as the use of food court top-up cards in shopping centers. Due to its limited use, closed-loop e-money players with floating funds of less than Rp 1 billion are not required to secure any licenses from BI.
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