1

BANK INDONESIA ROLES

• Responsibilities:

Maintain exchange rate and price stability to a balanced and

sustainable economic growth

Promote smooth and sound payment and settlement system

• Financial Inclusion Advocacy:

Microfinance and access to finance for the unbanked

Consumer protection

Financial and payment system education

Advocacy program

Facilitation to meet supply and demand

2

Safe and

Efficient

Payment System

OVERSEER

Oversight payment

system

Ensuring consumers

protection.

FACILITATOR

Facilitate payment

system

development by

industry

REGULATOR

Formulate policy and

regulation

LICENSOR

Give a license to

operate payment

system

OPERATOR

Cheques clearing and

settlement

BI ROLES IN RETAIL

PAYMENT SYSTEM

3

DIGITAL PAYMENT FOR FINANCIAL

INCLUSION

E-Money Chip-based

Server-based

E-Money

• International Finance Corporation (2014) defines “digital financial

services” as encompassing electronic payments, including retail

payments by card or mobile phone.

• Digital payments within the financial inclusion framework is aimed to

enhance financial access to society from any location and involves

connectivity between both financial and non-financial institutions.

Types of Digital Payment:

Mobile Banking

Internet Banking

Account-Based

4

MPS

3

Mobile Payment to Bank Account

2 P to P

Transfer

5

Cash Out

4 Bank Account to Mobile Payment

(Top up)

1

Government Aid Program

Digital Financial

Services (DFS)

using Registered

E-Money

BI New Regulation on Mobile Payment

6 Agents: including persons

5

RISKS AND MITIGATION

Risk Related E-Money for Financial Inclusion

• Operational Risk:

Transaction failure due to weak/no signal in the remote areas

Technology literacy in using new payment device/method, i.e.

mobile phone or EDC

Mitigation: promoting telco network reliability; education.

• Reputational Risk

Agent not properly trained

Agent fraud ie. stealing money, fake transaction

Mitigation: agent due diligence; regulation; supervision.

• System Risk

System loop hole: fraud from internal organization

Weak security in initial phase ie. Using unencrypted SMS

Mitigation: Regulation: obligation of e-money provider to use a

secure system and comply with international standards.