Indonesia pushes for standardised QR codes

Adoption of QR payments and mobile wallet technology has increased by more than a quarter across Asia in the past 12 months, with transaction values forecasted to hit almost $700bn per year by 2022 in China alone.

Yet while hungry payments start-ups and media pundits have got their gaze fixed on the region’s more influential economies, some of Asia’s biggest and most lucrative opportunities are actually unfolding further to the south.

At present, Indonesia’s mobile payments scene pales in comparison to the developments taking place in China. Mobile POS payments only account for around $18m per year, with just under a million Indonesian customers currently utilising available mobile payments platforms on a regular basis.

That being said, uptake has increased two-fold over the course of the last twelve months – and it’s not hard to see why. QR payments make perfect sense for Indonesia, where credit and debit card penetration is relatively low, smartphone penetration is sky-high and access to brick-and-mortar financial institutions is inconsistent.

That’s why there has been a sharp rise in the number of market participants competing in the country’s mobile payments space over recent years. Bank Indonesia has now granted permission to 12 companies using QR codes to facilitate mobile payments, including Go-Pay, TCash, OVO, BNI Yap!, BRI and Go-Jek – which was recently named Indonesia’s first-ever billion-dollar unicorn.

Meanwhile, formidable incumbent Mastercard has started trialling Masterpass QR in Indonesia and applied to the government for permission to bring the service to market by the end of 2018.

Yet as more operators are given permission to rollout new QR payments products to meet imminent demand, regulators in Jakarta are scrambling to stay ahead of the market by establishing a new standardised system with which to control Indonesia’s mobile payments.

Last week, Bank Indonesia announced it had successfully completed the first phase of testing for its new QR standardisation programme, which saw Bank Negara Indonesia, Bank Permata, TCash and Artajasa pilot a government-designed, uniform QR system in order to test its interoperability between banks, telecom firms and fintechs. According to Bank Indonesia, the standardisation is required to ensure the safety of customers and create payment experiences that are quicker and more efficient.

As a result of August’s successful testing phase, the central bank is now preparing to launch its second of three tests with a different group of market participants, which will focus on the business applications of standardisation to better inform the government’s impending new regulatory regime surround QR codes in payments.

That regime is expected to be introduced in the coming year as part of national payments gateway, Gerbang Pembayaran Nasional, which was launched earlier in 2018 to cut the cost of cashless interbank transactions. Although Jakarta’s nationalised gateway has received a somewhat lukewarm reception thus far, Indonesia certainly isn’t the first country in the region to pursue a standardised and regulated QR payments system.

In January, seven mobile wallet providers and payment networks joined forces to launch a new consortium to push the adoption of a single QR payment scheme in Singapore after the Monetary Authority of Singapore endorsed the specifications for a new common QR code.

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