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BI tightens capital control over payment system firms
The bigger the company, the more heavily regulated it will be, said financial systems surveillance head Budiatmaka.
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People leave the Bank Indonesia (BI) office building in Central Jakarta on Feb. 26, 2020. (JP/Dhoni Setiawan)
B
ank Indonesia (BI) has put into effect minimum initial capital requirements for payment system providers in order to tighten control over the country's burgeoning financial technology (fintech) companies.
The central bank announced on Wednesday the issuance of two derivative regulations of BI Regulation No. 23/2021 that officially impose such requirements on payment service providers (PJP) and payment system infrastructure providers (PIP). The regulations came into effect on July 1.
The PJP category includes e-wallets, such as ShopeePay, GoPay and OVO, payment gateway providers such as Midtrans and Cashlez, and other non-bank financial institutions. Meanwhile, the PIP includes switching companies such as ATM Bersama and ALTO.
Read also: Regulators, fintech companies work to balance innovation, regulation
The regulations require local switching companies to have at least Rp100 billion (US$6.92 million) in initial capital. Meanwhile, a PIP must have minimum initial capital ranging from Rp 500 million to Rp 15 billion depending on the variety of services offered.
“The more [service] permits they have, the bigger the capital requirement,” said BI financial systems surveillance head Budiatmaka at a press briefing about the new regulation on Wednesday.
“The bigger, more complex and more systematic their business activity, the more they will be treated like banks,” he reiterated.
