psra 2015 - state of indonesian payments part 2
TRANSCRIPT
HOW TO ENCOURAGE E-MONEY IN INDONESIA
- part 2
BE LOCALLY RELEVANT.
Register a team of 3 in charge of growing your payments business at only $7950. CALL +65 6809 3910 FAX +1 646 513 4296 EMAIL [email protected] WEB arcmediaglobal.com/payments FOLLOW @PaymentsAsia
13-14 AUGUST 2015 | JAKARTA
Follow @PaymentsAsia
Why does Bank Indonesia have to be present in promoting financial inclusion?
Financial inclusion is found to be highly relevant to support effective functions and tasks of Bank Indonesia in terms of monetary aspect, payment system, and macroprudence.
In terms of financial system stability, financial inclusion helps reduce pressures from liquidity risk and credit risk in banking sector.
From liquidity aspect, banks gain relatively stable retail fund sources even in shocks.
From credit aspect, new retail markets open, primarily micro and
small credits, endorsing diversification of
portfolios and credit risks.
Financial inclusion programs further help increase
community’s capability with the resulting financial responsibilities after
implementation of financial education and consumer
protection programs.
From monetary policy aspect, with financial inclusion, policy
rate can touch the community at all levels in any places because
policy rate is transmitted through banks, thereby supporting to realize effective monetary
policies and the community will not be affected by the second round effect of the policies.
Meanwhile, from payment system aspect, smoother
payment system to the whole areas leads to the common
use by wider community wherever they are. In
addition, less cash society program may be implemented
with added value for the community and economy.
ENTER INDONESIAN PAYMENTS
WITH CONFIDENCE
Register a team of 3 in charge of growing your payments business at only $7950. CALL +65 6809 3910 FAX +1 646 513 4296 EMAIL [email protected] WEB arcmediaglobal.com/payments FOLLOW @PaymentsAsia
13-14 AUGUST 2015 | JAKARTA
Follow @PaymentsAsia
What are the strategies of Bank
Indonesia?
Educating people at the bottom of the pyramid to learn to keep their money
from cash-based in the house to account-based in
electronic money accounts.
How to encourage use of e-money
It may help reduce consumptive tendency and serve as the initial point of financial diary, managing
simple finance supported by financial education programs.
How to reduce consumptive tendency
Through BI roles in financial inclusion, it is expected that the capability and life quality of people at the bottom of the pyramid will improve.
The impact of financial education
high printing cost of approximately Rp 3 trillion/year, small money in hand,
much time to count the change, and difficulty in
keeping much cash
The cost of cash for Indonesia
Bank Indonesia and the relevant institutions (the Coordinating Ministry of Economic Affairs, Ministry of Finance, DKI Jakarta
Province Government, and the Association of Indonesian Province Governments) as well as industry actors in payment system under the Association of Payment System in Indonesia
(ASPI) have launched Non-Cash National Movement (GNNT) on 14 August 2014.
Who are leading the Indonesia’s Non-Cash
Movement?
The GNNT initiative aims to encourage and expand the use of non- cash
transactions to increase economic efficiency, security, and convenience in transactions, strengthen transparency
and accountability, and support efforts to prevent corruption, money laundering,
and terrorism funding.
What is the Non-Cash National Movement
(GNNT)?
Efforts to realize expanded use of non-cash transactions are made not only for retail
transactions, but also for high value transactions to facilitate financial revenue
and expense transactions of corporations and the
government.
1. service expansion through telco network 2. synergy of banks and non-banks, e-
commerce services3. public and government services in 34
ministries4. regional government services, and 5. the services of state owned enterprises
(SOE) and regional owned enterprises (ROE)
What are the 6 Priority Programs in the National Non
Cash Initiatives?
GNNT aims to increase public awareness of the
use of non-cash instruments to gradually
establish less cash society (LCS), particularly in making transactions in their economic activities.
As a form of our commitment to the expanded use of non-
cash instruments, we will make GNNT as an annual movement with various
activities to increase public understanding on the use of
non-cash instruments in making payment transactions.
the huge potential of transportation sector in
Jakarta of Rp 23.4 trillion/year (US$ 1.76bn)
Potential of e-payments in Indonesia
HOW CAN OMNICHANNELS INCREASE YOUR
PAYMENTS REVENUE?
Register a team of 3 in charge of growing your payments business at only $7950. CALL +65 6809 3910 FAX +1 646 513 4296 EMAIL [email protected] WEB arcmediaglobal.com/payments FOLLOW @PaymentsAsia
Dr Moekti Soejachmoen, Economist and Head of Mandiri Institute, Bank Mandiri chairs this session.
13-14 AUGUST 2015 | JAKARTA
Follow @PaymentsAsia
GROW THE REAL BUSINESS, NOT JUST
THE BUZZ Implement expansion that you
will be proud of by meeting people who have already scaled
payments and achieved wide adoption, like Dr Moekti
Soejachmoen, Head of Mandiri Institute, Bank Mandiri, who will
be chairing the panel on Omni-Channels to Support Digital
Banking and Discuss How You Can Widen Adoption with
practical insights.
In just 17 years, Bank Mandiri has earned 16 million banking
customers, with US$ 2bn in profits. Through important
partnerships, it is set to grow to tap the 50 million Indonesians
who will enter the middle class before 2020.
Don’t you want this valuable inside information?
TransJakarta buses carry 320 thousand passengers every day with an annual
turnover of Rp 680 billion.
Electric trains as the veins of transportation in Jakarta can carry 400 thousand passengers per day
with an annual turnover of Rp 1.4 trillion.
That’s a lot of passengers!
The biggest potential is fuel expense in gas stations, which, with an assumed
consumption of 1-4 liter per vehicle per day, will reach Rp 14.6 trillion per year.
How others are helping with the GNNT less cash
initiative?
E-ticketing of Jakarta commuter trains has been interconnected to
4 electronic money of 4 banks.
To increase the local revenue of Jakarta, e-payment has been
implemented for redistribution by street vendors and e-parking.
If you wish to ride on TransJakarta buses, you must also use electronic
money.
GNNT is also a part of services program for
Indonesian migrant workers by the
Ministry of Manpower and
BNP2TKI through payment of
placement and protection services
for Indonesian migrant workers
and financial education program
for Indonesian migrant workers
and their families.
It is also encouraged that remittance in relation to
Indonesian migrant workers is made through electronic
money. It aims to help reduce the relatively high remittance cost borne by
Indonesian migrant workers.
More Synergies
SPONSOR THE AWARDS SHOW BY BEING BRANDED AS THE PRESENTER! CALL +65 6809 3910 FAX +1 646 513 4296 EMAIL [email protected] WEB arcmediaglobal.com/payments FOLLOW @PaymentsAsia
13-14 AUGUST 2015 | JAKARTA
Follow @PaymentsAsia
Various cooperation and facilitation by Bank
Indonesia have been consistently made to
encourage cash services. In the following year, BI has recorded synergy with 11
Ministries and 34 province governments.
BI records 5 forms of BI facilities related to non-cash services, namely:
1. mapping of available non-cash services forms,
2. preparation of business model and business process,
3. facilitation of non-cash services availability with industries, and
4. implementation of non-cash services and education
Non-Cash Means of Payment: Paper-based and Cash-based
Paper-based includes checks, giro biljet, and debit
notes.
Meanwhile, electronic-based among others
includes ATM/debit cards, electronic money, credit cards, and mobile money.
Various cooperation and facilitation by Bank Indonesia have been consistently made to
encourage cash services. In the following year, BI has recorded synergy with 11 Ministries and 34
province governments.
BI records 5 forms of BI facilities related to non-cash services, namely:
mapping of available non-cash services forms, preparation of business model and business
process, facilitation of non-cash services availability with
industries, and implementation of non-cash services and
education.
Electronic Money = Cash Money changed to an electronic form.
What is e-money?
1. initial deposit2. saved in a particular medium (either cards or
communication devices)3. the main function as a means of payment, and 4. non-deposit making it ineligible for deposit insurance
and interest
Electronic money saved in cards is usually issued by banks, while non-cards are usually issued by telco companies.
What are 4 characteristics of electronic money?
Therefore, electronic money can be used for shopping and purchases.
However, there is something better than traditional money: electronic money can be used to pay bills, transfer between individuals, or withdraw cash. It is similar to a bank account.
Is electronic money money?
1. Unregistered which does not require user data registration, and
2. Registered which requires the
electronic money holder's identity data to be recorded with an issuer
What are 2 types of electronic money?
1. Maximum balance is Rp 5 million,
2. transfer is permitted, and
3. cash withdrawal is possible
What are the 3 advantages of registered electronic money in
Indonesia?
Expansion of financial inclusion: Synergy of Electronic Money and Digital Financial Services (DFS)
http://www2.deloitte.com/content/dam/Deloitte/sg/Documents/financial-services/sea-fsi-digital-financial-services-in-Indonesia-noexp.pdf
As an embodiment of Bank Indonesia’s financial inclusion initiative, DFS is an innovation to bring financial access closer to the community in remote areas.
Through DFS, payment system and financial services no longer depend on the existence of branch offices of banks.
Such service is provided by providers in cooperation with third parties by using mobile and web-based technology devices and facilities.
No more dependence on physical branches
Third parties in such services expansion are called DFS in the form of legal entities or individuals.
DFS individual agents are companies with no legal personality and individuals.
DFS agents function to provide facilities of electronic money registration, top up, payment, cash withdrawal, and distribution of government’s aid to the community.
The product used in DFS is server-based electronic money
transacted online.
1. no need to come to branch offices of banks, 2. save money and time, 3. has a medium to temporarily save money in a safe
manner, 4. learn to save and be recognized by banks, and 5. serve as the first step to recognize other financial
services.
Therefore, the overall transformation process of public culture and paradigm in financial transactions is in line with the road map of financial inclusion and electronification designed by Bank Indonesia.
What are the benefits of DFS for the community?
1. facilitating registration, 2. top up, 3. cash withdrawal, 4. payment of bills, and 5. distribution of government’s
aids.
What are the 5 functions of DFS?
BUSINESS MODELS YOU CAN USE TO ACHIEVE WIDE
ADOPTION
Islamic Boarding School-Based DFS: Financial Inclusion
Development Model
Bank Indonesia has also observed Islamic boarding schools as the target of financial inclusion development through DFS.
In relation to this, Bank Indonesia and the Ministry of Religious Affairs have signed a Memorandum of Understanding on Development of Economic Independence of Islamic Boarding Schools and Improvement of Non-Cash Services for Financial Transactions in the Ministry of Religious Affairs in Surabaya.
Such memorandum signing is one of the series of events of Sharia Economic Festival (ISEF) held from 3 to 9 November 2014 in Surabaya.
This Memorandum of Understanding is first implemented in East Java because there are approximately 6,000 Islamic boarding schools there and it is in line with the government’s plan to make Surabaya the Center of National Sharia Economic Development.
The initial movement in East Java is expected to inspire other areas to accelerate financial inclusion in the community.
The cooperation between Bank Indonesia and the Ministry of Religious Affairs is triggered by the huge number of muslim population in Indonesia.
Accordingly, the existence of educational institutions becomes more widespread, and the number of Islamic boarding school students also increases.
With the huge potential, financial education provided to such students will encourage economic independence, resulting in financial inclusion in the wider community.
Islamic boarding schools will act as DFS agents interacting with banks.
The users in such DFS are the students and the surrounding community. Islamic boarding schools as DFS will provide financial products and services to users.
What is the business model of the Islamic boarding school-based
DFS?
Bank Indonesia is now establishing BMT Sidogiri in Pasuruan, East Java. BMT Sidogiri’s assets in financial year 2013 reached Rp 1 trillion and it is presently the
biggest cooperative in East Java.
BMT Sidogiri Cooperative acts as a DFS agent interacting with the electronic
money issuer.
As a DFS agent, BMT Sidogiri can provide services to pay tuition fees, deposit and withdraw cash, and remit and receive
money.
The students and the community can also shop in Basmallah convenience store
owned by BMT Sidogiri by using electronic money.
ENTER INDONESIAN PAYMENTS
WITH CONFIDENCE
Register a team of 3 in charge of growing your payments business at only $7950. CALL +65 6809 3910 FAX +1 646 513 4296 EMAIL [email protected] WEB arcmediaglobal.com/payments FOLLOW @PaymentsAsia
13-14 AUGUST 2015 | JAKARTA
Follow @PaymentsAsia
Source: Public Lecture on the Central Bank -
Bank Indonesia’s Policies on Financial
Inclusion through Non-Cash National
Movement
More insights
at…
See you there!