Bank of Indonesia (BI), the country’s central bank, has asked China’s Alipay to review its application for offering payments services in the country, a BI official said at a hearing in the House of Representatives on Monday.
Deputy governor of BI told the House of Representatives’ Commission XI, which oversees finance and banking matters in the archipelago, that Alipay’s operation in the country was delayed due to its paperwork and incomplete documents, according to Jakarta Globe.
Apart from Alipay, another Chinese payment service WeChat Pay was given a nod by BI last year to operate in the country in partnership with local lender CIMB Niaga Indonesia.
Both the payment services have announced to operate in Indonesia. So far, WeChat Pay is the only foreign payment service in Indonesia, which has secured permission to operate in the country.
According to the BI regulation, any foreign payment service needs to forge a partnership with local lenders that have core capital of over Rp 30 trillion ($2.19 billion) or categorized as BUKU 4, a clause that allows them to conduct all business transactions in rupiah and other foreign currencies.
There are around six local lenders currently who are categorized in BUKU 4 namely Bank Mandiri, BCA, BRI, BNI, Bank CIMB Niaga, and Bank Panin.
Bank Indonesia’s Filianingsih Hendarta, head of BI’s macroprudential policy department, said to local media that the institution has issued a license for WeChat Pay to operate in Indonesia in partnership with Bank CIMB Niaga, the country’s fifth-largest lender by assets.
Meanwhile, Alipay is also expected to partner with Bank CIMB Niaga as the lender is now preparing the electronic data capture (EDC) devices to roll out transactions for both the Chinese payment services.
Earlier this month, Lani Darmawan, commercial director at CIMB Niaga, said that some of the EDC devices have successfully catered to consumers who are using the WeChat Pay system.
Going forward, it will cater to more Chinese tourists coming to Indonesia, especially in tourist destinations such as Bali and Yogyakarta.
BCA also announced alliances with Alipay and WeChat Pay in October last year. The lender said it will be finalized in the second quarter of this year.
Another foreign fintech player Whatsapp Pay, a payment service unit of US-based messaging app Whatsapp, is currently approaching other local digital wallet service providers such as DANA, GoPay, and OVO.