ASIA NEWS NETWORK
WE KNOW ASIA BETTER
BI prepares for Asean integrated payment system
Publication Date : 30-01-2014
Bank Indonesia (BI) is currently developing tools to create a more time-efficient and low-cost payment system ahead of the launch of the Asean Economic Community (AEC) in 2015, when there will be a free flow of goods, services and people among Asean member countries.
“We are working to develop a more integrated national payment system before having an integrated payment system within the Asean region,” BI payment system executive director Rosmaya Hadi said at a seminar held by electronic payment service provider PT Artajasa Pembayaran Elektronik on Wednesday.
With the new system, the Indonesian banking industry will have a new real-time gross settlement system (RTGS) in which bank customers can carry out multicurrency transactions on a real-time basis, she said.
“With this system, a bank customer can carry out multicurrency transactions in only minutes through non-cash payments,” she said, adding that BI would launch the new system this year.
Rosmaya also said the Indonesian central bank and its counterparts in five Asean members, including Malaysia, the Philippines, Singapore and Thailand, had agreed to prepare for an integrated payment system.
“Central banks of the Asean 5 have formed task forces on trade settlements, retail payments, monthly remittances, capital market settlements and standardization to formulate a set of regulations and schemes with which we will have an Asean integrated payment system,” she said.
Under the regional integrated payment system, people in Asean will be able to make financial transactions through ATMs, credit cards or electronic money without sacrificing much time and money.
According to a report by the Asean Working Committee on Payment and Settlement Systems (WC-PSS), the integrated payment system will reduce bank charges (such as foreign exchange spread among Asean currencies and handling fees), and encourage regulated non-bank remittance service providers to adopt international/common standards in retail payment systems.
Of all the Asean member countries, only Indonesia, the Philippines and Thailand currently have full ATM interoperability, according to an Asian Development Bank Institute report published in 2013.
“When the AEC commences, Asean member countries will have greater need for an integrated payment system as people from across the region will have to carry out transactions from and to their home countries,” said Deputy Trade Minister Bayu Krisnamurthi at a similar event.
The AEC, also known as the Asean single market, will commence at the end of 2015. Under the AEC, the Asean 5 and Brunei Darussalam will have free trade agreements, while Cambodia, Laos, Myanmar and Vietnam will fully participate in the community in 2018.
Artajasa president director Arya Damar said that Indonesia should also develop its banking sector to tap its large market by utilizing more cashless transactions, otherwise other Asean countries’ banks would do so.
Citing BI data, Artajasa said that with a total of 800,000 local branches, commercial banks in Indonesia could reach only 20 per cent of the total working-age population of around 150 million people.
“Meanwhile, with only 15,000 ATMs, Malaysian commercial banks can reach 66 per cent of its total working-age population,” he said.
Thai commercial banks, with around 66,000 ATMs, can reach about 30 per cent of Of Thailand’s total working-age population, he added.