JAKARTA (TheInsiderStories) - The government’ owned, PT Bank Rakyat Indonesia Tbk (IDX: BBRI), has received approval from the Financial Services Authority and Bank Indonesia (BI) to run Alipay wallet transactions in the country, the issuer announced last week. In this collaboration, the bank become an acquirer, while Alipay as an issuer.
Since 2018, the Hangzhou-based card-payment operator owned by Alibaba Group has explore the collaboration with various local banks. Its competitor, Wechat Pay also eyes the potential market in Indonesia with other banks. The partnering with two providers has potential to attract revenues around Rp2 trillion (US$141.83 million) from Chinese visitors.
Quoting data from the statistics bureau, the growth of Chinese tourists to the country from 2009 to 2019 grew significantly by around 450 percent. The number of visits and expenditures per visit that has increased from year to year, said the director, Handayani, and has become a big business potential for the company’ fee based income.
Currently, she asserted, the issuer continues to strive the expansion of the cashless transaction system in the community through the QRIS payment method. In this collaboration, the lender also partners with PT QFPay Technology Indonesia as a support provider or system integrator to integrate both systems.
As an initial step for this cooperation, Bank Rakyat will focus on penetrating Alipay‘ acceptance in its work areas throughout Indonesia such as Bali, Batam and Manado. Outside these areas, the bank will roll out Alipay acceptance in all merchants.
“Alipay intends to enter Indonesia in partnership with Bank Mandiri and BRI (Bank Rakyat Indonesia),” said the deputy of BI, Sugeng, on Jan. 27
The central bank requires the settlement process of electronic money transactions in the country must be carried out by local banks in BOOK 4 scale. In addition, BI also required the issuers to place a float fund of at least 30 percent in BOOK 4.
While a maximum of 70 percent of floating funds must be placed in state bond, other financial instruments issued by the government, or in Bank Indonesia accounts. This provision applies to all electronic money issuers, both foreign, non-bank and non-BOOK 4 banks.
The central bank also put a 49 percent limit on foreign ownership in companies that offer e-money services in a bid to better regulate such services amid growing interest in financial technology. The limit was set by central bank to all electronic money issuer companies, both operating and newly handing permits.
The rules said, every company offering payment in electronic money services also must obtain a permit from BI. The new foreign ownership limit applies only to new investment, or to any existing firm who is changing ownership.
Alipay and Wechat are already operating in Indonesia without holding the local banks. The operations categorized as illegal. Beside Bank Rakyat, other banks like PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Mandiri Tbk (IDX: BMRI), and PT Bank Central Asia Tbk (IDX: BBCA), also propose the same license to cooperate with both providers.
US$1: Rp14,100
Written by Editorial Staff, Email: theinsiderstories@gmail.com
