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Payment gateway lures more banks
Domestic payment: Displaying mockups of Bank Mandiri debit cards during the card launch in Jakarta on Monday are (left to right) Bank Mandiri small business and network director Hery Gunardi, Bank Indonesia head of electronification Pungky P
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span class="inline inline-center">Domestic payment: Displaying mockups of Bank Mandiri debit cards during the card launch in Jakarta on Monday are (left to right) Bank Mandiri small business and network director Hery Gunardi, Bank Indonesia head of electronification Pungky P. Wibowo and Bank Mandiri IT and operation director Rico U. Frans. (JP/Steven)
More banks are showing active participation in the government’s National Payment Gateway (NPG) initiative, with the latest being state-owned lender Mandiri, which on Monday issued its NPG debit card.
The payment gateway, which was initiated by Bank Indonesia (BI) Governor Agus Martowardojo and launched by President Joko “Jokowi” Widodo on Dec. 4 last year, is intended to simplify electronic payment methods provided by all domestic lenders using a series of localized system networks, thus allowing cross-lender transactions at a lower cost.
The NPG-based debit cards, which bear the logo of Indonesia’s national bird Burung Garuda, can be used at any ATMs or electronic data capture (EDC) machines of the banks who have joined four domestic bank switching service companies — ATM Bersama, Prima, Alto and state-owned PT Jalin Pembayaran Nusantara (JPN).
“Therefore, the launch of the new cards is also expected to reduce our dependency on foreign payment switching providers,” said Bank Mandiri small business and network director Hery Gunardi, referring to Visa and MasterCard.
From The Jakarta Post’s observation, the previous versions of Bank Mandiri debit cards were issued by Visa as seen on the cards’ logo.
Despite lower costs for customers using the new cards, Hery said the lender was confident the move would not reduce its fee-based income because it would also spend less money on managing its transactions using NPG.
Before Bank Mandiri, three other lenders — fellow state lender Bank Nasional Indonesia (BNI), privately-owned Maybank Indonesia and regional lender Bank DKI, had also issued their own NPG-based debit cards, BI head of electronification and NPG Pungky Purnomo Wibowo said on the same occasion.
Pungky added that all 115 lenders listed by BI were required to issue NPG-based debit cards this year. However, as of April, only four domestic lenders had implemented the system as stipulated in a 2017 Bank Indonesia Regulation (PBI) on the National Payment Gateway.
Hery said the lender planned to issue at least three million new cards in total for the silver, gold and platinum category this year.
“From now on, we will also offer these NPG-based cards to our new customers,” Hery said at the launch of the cards at Bank Mandiri’s headquarters in Jakarta, adding that the bank currently served more than 18 million customers, in addition to one million to 1.3 million new customers Bank Mandiri has estimated to attract every year.
Meanwhile, all existing customers can simply go to any Bank Mandiri branch in the country to trade in their old debit card with the new one.
The debit cards, said Hery, had lower administration fees and lower cross-bank transfer costs, among other advantages.
Meanwhile, data from BI shows that as of January, 167 million debit cards were being circulated on the market — all of which are likely to be replaced by the new NPG-based ones.
As the cards are using a localized system, they will not be available for overseas transactions for the moment, except for lenders who have implemented a more advanced standard, namely the National Standard Indonesian Chip Card Specification (NSICCS), in their NPG-based debit cards.
“We are still gradually preparing a method for the [NPG-based] cards to be able to be used overseas,” he said on the sidelines of the event. “However, the application of NSICCS is entirely up to the lenders in accordance with their needs or demands.”
Additionally, the NSICCS system also provided a safer database system, as all of its transactions would be routed and managed within the country and used specialized chips that prevented data leaks or other kind of breaches, Pungky claimed.
“To complement the NPG system, all of the lenders have also been obliged to partner with at least two switching services by June 31 this year. Last January, all of them had partnered with one service each,” Pungky said.
