Indonesia’s central bank Bank Indonesia (BI), officially imposed the QR code standardization called QRIS (Indonesian Standard QR Code) on January 1st, 2020. This means that all mobile payment providers must replace their QR code with QRIS for easier transactions.
The discourse regarding QRIS adoption first surfaced in April 2019, giving time for the mobile payment service providers to adjust to these provisions. The standardization of the QR code provides an integrated payment system that is efficient, inexpensive, and safe. Moreover, it can improve interconnectivity in payment systems so that e-wallets from different providers can be used in one QR scanning system. For example, GoPay users can make transactions on the ecosystem of LinkAja and vice versa.
Responding to this, LinkAja’s head of corporate communications Putri Dianita said that the firm is still progressively registering and changing all QR code standards to QRIS, and that almost all of LinkAja’s static QR codes have already adopted the new system. The company is introducing the QRIS to merchant partners who are mostly located in tier two and three cities. LinkAja currently has 250,000 partners and 40 million users, Dianita said. She believes that QRIS will positively impact merchants and customers as it improves transaction efficiency.
Gojek’s fintech arm GoPay also shared a similar view. The firm stated that it will continue supporting Bank Indonesia in promoting and implementing QRIS. “We hope that QRIS implementation will encourage the number of users and frequency on non-cash transactions in the community. We believe that open ecosystems provide many benefits. In addition to increasing economic efficiency, it also encourages the growth of businesses, particularly micro-businesses, in Indonesia,” GoPay’s head of government relations and public policy Brigitta Ratih Aryanti told KrASIA.
Aryanti said that GoPay has registered almost all of their merchant partners and has carried out joint activities with BI to help GoPay migration business partners adopt QRIS since July 2019.
QRIS current fee does not burden e-wallet platforms
Back in August 2019, BI set a merchant discount rate (MDR) of 0.7% for merchants for regular On Us and Off Us, QR code transactions. “On us” refers to transactions where the acquirer and card issuer are the same entity, while “Off us” means that the acquirer and card issuer are different entities.
For merchant transactions specifically in the education sector, the fee is 0.6%, and it will charge only 0.4% fees for transactions in the gas stations. Meanwhile, QR code transactions for donations or social assistance will not incur any cost.
This fee is actually cheaper than transactions using debit cards on electronic data capture machines. On Us transactions using debit cards are subject to an MDR fee of 1%. However, Off Us transactions with debit cards only incur a 0.15% fee.
E-wallet providers generally do not see the current rates as burdensome for their business or for merchant partners. Both LinkAja and GoPay said that they will always comply with BI regulations and that this standardization will have a positive impact because it creates healthy competition among industry players.
“For this fee imposition, it is up to merchants whether it will later be included as a price component to consumers. However, since the average transaction value using electronic money is not too big, merchants wouldn’t mind bearing this fee themselves,” said Dianita.
There has been speculation regarding the rising fee of QR code transactions and uniform tariffs this year but mobile payment platforms declined to comment on this, citing they will wait for the official announcement from BI.
Responding to this issue, digital economist and executive director of Indonesia ICT Institute, Heri Sutadi said that considering the cashless practice is a relatively new concept in Indonesia, the central bank should not issue regulations that may burden the industry and e-wallet development.
“There are things that can be regulated by the central bank. For example, the standardization of the QR code, which is a good move to promote interoperability across QR code payments. However, in terms of fees, it should be a domain for e-wallet operators, and it should not be burdensome to other stakeholders such as merchants and consumers,” he told KrASIA.
Sutadi also stated that BI should wait for a more appropriate time if it wants to make uniform QR code transaction fees in the future. “The digital payment industry in Indonesia is not mature yet, I think, [the tariff uniformity] should wait for another one or two years,” he added.
