As of 1 July 2021, Bank of Indonesia (“BI”) Regulation Number 22/23/PBI/2020 of 2020 on Payment System (“PBI 22/2020”) which was issued on 30 December 2020 has officially become effective. Henceforth, PBI 22/2020 shall serve as the umbrella regulation of Indonesia’s payment system. PBI 22/2020 is expected to bring much-needed reformation in the payment system regulatory framework in response to the digitalization and innovation of payment system by way of rearrangement of payment system industry.

PBI 22/2020 introduces ‘same risk, same regulation’ principle wherein PBI 22/2020 shifts regulatory approach of payment system from institutional-based to activity and risk-based approach. PBI 22/2020 aims to increase the efficiency in licensing process by granting licenses in bundle (bundling) in accordance with activities grouping. Enactment of PBI 22/2020 is in line with five initiatives on the implementation of strategic program over the course of 2019 to 2025 of BI’s Indonesia Payment Systems Blueprint 2025 issued on 2019 which encompass (i) Initiative 1: Developing open banking; (ii) Initiative 2: Strengthening the configuration of retail payment systems; (iii) Initiative 3: Strengthening financial market infrastructures; (iv) Initiative 4: Developing public infrastructure for data; and (v) Initiative 5: Strengthening the regulatory licensing, and supervisory.

Written by Ahmad Jamal Assegaf and Caroline Ignes Tando. Please click on the download button below to read this publication.

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