MICROCAPITAL BRIEF: Bank Indonesia Releases “Guiding Principles” for Branchless Banking Trial; Indosat, Telkomsel, PT XL Axiata to Offer Money Transfers for $0.21

Bank Indonesia, the country’s central bank, recently issued “guiding principles” for upcoming tests of a banking and payment system through existing Financial Services Intermediary Units (FSIU), registered third-party services which facilitate the provision of non-conventional banking services. These principles are intended to provide banks as well as telecommunications companies and FSIUs with a more comprehensive understanding of branchless banking in an effort to effect “adequate preparation to support project implementation of the trials.” These principles include a suggested business model, a summary of products available, descriptions of past activities, a summary of FSIU requirements and the technology used, risk management strategies, suggestions for preventing money laundering and terrorism funding and methods of educating customers and providing customer protection.

The following banks have announced that they will participate in the pilot tests: Bank Sinar Harapan, Bank Mandiri, Bank Tabungan Pensiunan Nasional, Commerce International Merchant Bank Naiga and Bank Rakyat Indonesia. Users of the service will be able to send and receive funds with “mobile wallets” at participating banks’ branches and automated teller machines (ATMs). The trials, which are expected to begin in May 2013 and last until November 2013, will be run in the Indonesian provinces of Bali, Central Java, East Java, East Kalimantan, North Sumatera, South Sulawesi, South Sumatera and West Java.

The announcement of Bank Indonesia’s upcoming tests comes in the wake of the announcement of new interoperability features among the mobile money services of three of Indonesia’s mobile network operators, Indosat’s Dompetku, Telkomsel’s T-Cash and PT XL Axiata’s LX Tunai. These features are expected to allow users to send and receive person-to-person (P2P) money transfers to and from users of any of the three services for a fee of IDR 2,000 (USD 0.21).

By Makai McClintock, Research Associate

About Bank Indonesia
Established in 1999, Bank Indonesia (BI) is the nation’s central bank. Its primary objective is to maintain currency stability by: formulating and implementing monetary policy, regulating and ensuring smooth operation of payment systems, and regulating and supervising the national banking system. As of 2012, Bank Indonesia’s governor is Mr. Darmin Nasution.

Sources and Additional Resources

Bank Indonesia Press Release, “Bank Indonesia Issues Guiding Principles for Trials of a Limited Banking and Payment System Service through Financial Services Intermediary Units,” http://m.bi.go.id/web/en/Ruang+Media/Siaran+Pers/Siaran+Pers_30042013.htm

Mobile Money Asia Post, “Mobile Money Interoperability in Indonesia Announced,” http://mobilemoneyasia.blogspot.com/

MicroCapital, December 13, 2012, “MICROCAPITAL BRIEF: Banks in Indonesia Claim Readiness for Branchless Banking, Pending Regulation Issuance,”
https://www.microcapital.org/microcapital-brief-banks-in-indonesia-claims-readiness-for-branchless-banking-pending-regulation-issuance/

MicroCapital, 5 July 2012: “MICROCAPITAL BRIEF: Indonesia: Banks Introduce Rabu Microsavings Program at Indonesian Banking Expo (IBEX)”, https://www.microcapital.org/microcapital-brief-indonesia-banks-introduce-rabu-microsavings-program-at-indonesian-banking-expo-ibex/#more-19433

MicroCapital, 27 January 2009: “MICROCAPITAL STORY: Bank Indonesia Welcomes the Competition of Foreign Banks Into Indonesia’s Microfinance Sector”, https://www.microcapital.org/microcapital-story-bank-indonesia-welcomes-the-competition-of-foreign-banks-into-indonesias-microfinance-sector/

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