The Indonesian government is currently trying to promote Indonesia’s own payment system the National Payment Gateway (GPN).
GPN was launched to the public on 4 December 2017 in Jakarta based on Bank Indonesia (BI) Regulation No.19/8/PBI/2017, and Members of the Bank Indonesia Board of Governors Regulation No.19/10/PADG/2017 concerning National Payment Gateways.
Despite its introduction 6 years ago, GPN only gained the spotlight in 2022, replacing the Mastercard and Visa dominance in Indonesia.
PT. Penyelesaian Transaksi Elektronik Nasional (PTEN) reported that 4 Bank has become partners of the Service Provider. The number is less than 1% of the total bank in Indonesia.
Becoming an alternative
Although GPN does not act as a replacement for Visa and Mastercard in the Indonesian banking system, it becomes an alternative for Indonesian people.
This alternative was made to protect consumer data and customer financial transactions throughout Indonesia without passing through foreign networks again.
However, with the recent war between Russia and Ukraine, President Joko Widodo encourages all parties not to rely on the use of foreign principal credit cards, especially for government credit cards to shop for goods or services.
The decision was made because Visa and MasterCard have closed their services in Russia in relation to the war. President Jokowi made a decision to issue domestic credit cards on April 2023.
GPN pros and cons
The establishment of GPN presents an option to use a payment method without dependence on VISA & Mastercard. However, the establishment was not without pros and cons.
Pros:
- The GPN will not charge additional costs for every merchant throughout Indonesia.
- There is no minimum transaction limit.
- Ease of transactions with various features that have been nationally standardized.
- GPN has implemented standardization of domestic processing fees.
- All transactions through GPN will be processed domestically so that information related to these transactions will be safe from various hacking risks.
- Customer data remains in the country.
It should be noted, however, that GPN doesn’t apply to international transactions.
Cons
- GPN cards only serve for domestic transactions.
- GPN cards are not yet connected for e-commerce payments such as Amazon, EBay, Alibaba, and others.
- Customers need to open a new special account when traveling abroad.
Who is in charge?
GPN falls under the authority if Bank Indonesia. However, to assist the central bank in managing the payment gateway, 3 new institutions were formed, they are:
- Standards Institution: an institution that compiles and manages Standards in GPN currently the responsibility of the Indonesian Payment System Association (Asosiasi Sistem Pembayaran Indonesia – ASPI).
- Switching Agency: an institution that administers the system used to link payment channel data between financial institutions. Currently, this task is managed by PT Artajasa Pembayaran Elektronik (ATM Bersama), PT Rintis Sejahtera (ATM PRIMA), PT Jalin Pembayaran Nusantara (ATM Link), dan PT Alto Network (ATM ALTO).
- Services Institution: an institution that manages the services of GPN, which is currently managed by PT Penyelesaian Transaksi Elektronik Nasional (PTEN).
Nationwide GPN adoption
Government assistance is inevitably the key to the nationwide adoption of GPN. The government has recently been intensively developing credit cards using the national payment gateway (GPN).
Most recently, President Joko Widodo (Jokowi) also directed local governments not to use Visas for payments.
Quoted from cnbcindonesia.com President Jokowi said that “BI is in continuous discussion with the industry, around 90% has been agreed, there is an arrangement, and most likely at the end of March or early April a so-called domestic credit card will be launched.”
A similar statement was also delivered by President Jokowi at the Opening of the Business Matching of Domestic Products event on March 15, 2023.
“We remember the sanctions from America to Russia, visas and Mastercard are a problem, if we can use our own platform and start spreading everything using it starting from the ministries of institutions, provisions, districts, cities, we will be calm”
Opening of Business Matching of Domestic Products on March 15, 2023
