Alipay’s Indonesia Operations Delayed By Red Tape

Indonesia’s central bank, Bank Indonesia (BI), has asked Chinese firm Alipay to review its payment services application. Officials in Indonesia’s House of Representatives confirmed the re-evaluation at a hearing, reports said.

BI’s deputy governor stated to Commission XI, a financial and banking oversight committee, that the application review will delay Alipay’s operation in the country. The Jakarta Globe reported that the process was triggered because of incomplete paperwork.

Filianingsih Hendarta, the head of BI’s macro-prudential policy department, said the institution has issued an official business license for WeChat Pay to partner with Bank CIMB Niaga — the country’s fifth-largest lender, according to asset size — and operate in Indonesia.

Alipay will also likely partner with Bank CIMB Niaga, as that lender readies electronic data capture (EDC) devices. Lani Darmawan, director of consumer banking at Bank CIMB Niaga, noted that a number of these EDC devices have engaged consumers also using the WeChat Pay system.

Alipay hopes to capitalize on Chinese tourists arriving frequently in Indonesia, eyeing heavy travel traffic in Bali and Yogyakarta.

In related regulatory news, Indonesia recently announced that it intends to reduce the threshold for taxing imported eCommerce consumer goods to help control the purchase of cheap foreign goods and protect smaller Indonesian firms.

“This is to protect firms [that’ve] been producing goods that are often traded in eCommerce, such as sandals, crafts and handbags,” said Heru Pambudi, customs director general.

“This is to protect firms who’ve been producing goods that are often traded in eCommerce, such as sandals, crafts, and handbags,” said Heru Pambudi, customs director general.