BI to regulate online trade payments

The Bank of Indonesia (BI) will soon release a set of regulations to handle e-commerce payment system in view of the rapid growth of online trade.

BI Deputy Governor Ronald Waas said in Jakarta on Wednesday that the Bank will release a BI Regulation (PBI) governing the process of transactions and payments before July 6, coinciding with Eid.

The PBI will also regulate online payment mechanism that was previously implemented in e-commerce through e-wallet and will also ensure continuous updating of the e-commerce security system.

The regulation will provide a safe payment mechanism for consumers and e-commerce organizing institutions, he added.

"The regulation is currently being discussed in the Executive Board meeting," he added.

The worth of online trade continues to soar every year. It was reported by the Ministry of Communication and Informatics in 2015 that e-commerce was valued at US$20 billion. This figure is expected to rise up to US$130 billion by 2020.

"We felt the need to regulate the payment system and release a PBI about it," Ronald stated.

"The regulation will control payment services provider and the supporting parties," he continued.

BI will require the service provider to have a legal status by establishing an e-wallet, for example.

Other than that, the Bank will also regulate online payment system used by online based financial industries (FinTech), an instrument whose use is currently growing very fast. The possibility is that the FinTechs payment system will be regulated by PBI as well.

The regulation for FinTechs mechanism is not a new thing in banking, as Real Time Gross Settlement (RTGS) system has existed in banking and was previously regulated by BI.

"FinTech has a number of authorities, including Financial Services Authority, which regulates credits and savings in FinTech. As for payment and transaction, BI will regulate these," he explained.

Source: Antara News