Digital Cash
    Category: Financial Revolution By : Shintya Felicitas Read : 655 Date : Friday, March 02, 2018 - 00:14:55




    The Bank of Indonesia (BI) has been promoting the development of e-money as a way to improve financial inclusion, as only 36% of the population has a bank account. “We are targeting the unbanked population to use e-money for transactions,” says Pungky Wibowo, BI’s director for policy and supervision of payment systems. E-money offers many advantages over cash-based systems, such as greater efficiency, lower costs for issuers, and less opportunity for theft.

    Indonesia has two kinds of e-money: chip based and server based. For chip based, the chip is embedded in a card similar to a credit card, and can store credit of up to Rp 1 million. Examples of this kind of e-money can be found in the cards used for public transportation and toll road payments. The other kind is a server-based e-money, typically available through a website, examples would be Go-Jek’s Go Cash and Tokopedia’s TokoCash. This kind of e-money can have accounts holding up to Rp 10 million. The two types also differ in that chip-based systems normally require no registration, making them convenient, while server-based systems are registered to the user, just like a bank account.

    So far, BI has issued e-money permits to 27 institutions, mainly banks, tech firms and telecom companies. According to BI data, until December 2017, the value of e-money transactions reached more than Rp 12 trillion last year, up 163% from transactions in the previous year. Last October, a milestone happened when all toll roads went non-cash, accepting only e-money payments for tolls. The public transportation system, including commuter lines, have also gone cashless for payments. The government had previously experimented with e-money, using an e-money card for social programs, such as the Prosperous Family Card (KKS) for non-cash food assistance. Pungky says the next step is to require e-payments for items such as air travel, utility bills and retail shopping.

    Financial services providers are also getting involved. Two of the country’s largest banks, Bank Central Asia (BCA) and Bank Mandiri, are pioneering e-money. BCA Corporate Secretary Jan Hendra says his bank has issued 14.6 million e-money Flazz cards that can be used for everything from transportation and retail payment, such as at fast-food chain McDonalds. Bank Mandiri, meanwhile, has around 13 million e-money cards in circulation, says Bank Mandiri Corporate Secretary Rohan Hafas.

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