Bank of Indonesia Debuts New Retail Payments System

The Bank of Indonesia (BI) on Tuesday (Dec. 21) debuted a new retail payments system that BI Governor Perry Warjiyo promised will cut the cost of money transfers while also supporting the ongoing growth of the digital economy across the nation, according to a Reuters report.

Digital banking transactions across Indonesia have grown 47% year-over-year through November to 3,877 trillion rupiah ($269.52 billion), in large part because of the ongoing spread of the COVID-19 pandemic around the world, according to BI data.

The new BI-Fast system brings customers real-time, secure money transfers of up to 250 million rupiah (about $170,000), at a maximum cost of 2,500 rupiah (17 cents) per transaction, said Warjiyo, compared to the current interbank money transfer cost of 6,500 rupiah (46 cents) per transaction.

“(BI-Fast) will accelerate the digitalization of the national economy, integrate the payment system industry from end to end — digital banking, FinTech, eCommerce and consumers, promote economic and financial inclusion and support the national economic recovery,” said Warjiyo.

Indonesia’s internet economy expected to be worth $146 billion by 2025, Reuters report, a figure that represents 20% compounded annual growth, according to a November report by Alphabet’s Google, Singapore state investor Temasek Holdings and global business consultants Bain & Company.

Related: Indonesian Startups Roll Out the Welcome Mat to US Investors

Earlier this month, Indonesia’s Ministry of Communications and Informatics invited U.S. investors to a virtual networking event as part of the Joint Exhibition & Junction of start-up Landscape in Indonesia, or JEJALA ID. The event introduced startup founders to investors and venture capitalists and included roadshows, workshops and seminars.

Semuel Abrijani Pangerapan, the ministry’s director-general of informatics applications, said the get-together was a way to ensure that “our thriving start-ups” will generate jobs, help grow the economy and lead to digital transformation.

Indonesia’s 2,100 startups include nine unicorns, the second most digital tech billion-dollar private entities in southeast Asia after Singapore, which has 15 unicorns. Indonesia also has the youngest demographics in southeast Asia.