Accelerate digital transformation to drive Indonesia’s economic development

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JAKARTA (ANTARA) – Digitalization is one of the main drivers of economy and finance, and the Indonesian government continues to optimize its utilization to promote the country’s economic growth.

When digitalization, technology and innovation are applied to the economic and financial systems, they will become engines for accelerating inclusive and sustainable economic growth, promoting social well-being and national progress.

In this context, Bank Indonesia (BI) has been continuously updating, improving and expanding the digitalization of the payment system by developing the Indonesian Payment System Blueprint 2030 (BSPI).

After launching the BSPI 2019-2025, Bank Indonesia has also formulated the BSPI for the next five years (2025 to 2030) with the aim of accelerating the advancement of the country’s digital economy for future generations.

Over the past five years, Indonesia has achieved several positive results through the implementation of BSPI 2025, such as the National Open API Payment Standard (SNAP), Quick Response Code Indonesia Standard (QRIS), BI-FAST Payment System, electrification, and regulatory reforms.

BI has expanded its cross-border QRIS cooperation to eight countries including Malaysia, Thailand, Singapore, the Philippines, Japan, South Korea, the United Arab Emirates and India.

In the future, Bank Indonesia will continue to expand the coverage of QRIS cooperation with other countries, especially Indonesia’s trading partners.

QRIS is BI’s payment standardization using the QR code method, making transactions easier, faster and more secure.

In the second quarter of 2024, the digital economy and financial transactions performed strongly, supported by safe, smooth and reliable payment systems.

This was reflected in Bank Indonesia’s real-time gross settlement (RTGS) transaction volume, which grew 13.42% year-on-year to IDR 42,008.08 trillion (USD 2.63 trillion).

In terms of retail transactions, BI-FAST transaction volume increased by 67.79% year-on-year to 785.95 million transactions. Meanwhile, digital banking transaction volume increased by 34.49% year-on-year to 5.363 billion transactions.

QRIS transaction volume increased by 226.54% year-on-year, the number of users reached 50.5 million, and the number of merchants reached 32.71 million.

However, despite the positive achievements, a number of challenges still need to be adequately addressed.

The prospect of achieving growth in digital transactions should prioritize three areas, the first of which is resilient and interoperable infrastructure.

The second focus area is consolidation of the industry to mitigate risks from shadow banking, while the third key aspect is collaboration between Bank Indonesia and the banking industry to encourage innovation and acceptance in a balanced manner, thereby strengthening consumer literacy and protection.

To this end, Bank Indonesia has developed BSPI 2030 to address this dynamic. The blueprint aims to achieve a resilient payment system in Indonesia.

The 2030 BSPI is a continuation of the 2025 BSPI, aiming to achieve end-to-end integration of the digital economy and finance.

President Joko Widodo (Jokowi) stressed that by 2030, Indonesia’s digital economy will grow fourfold to $210 billion to $360 billion, while digital payments will grow 2.5 times to $760 billion.

In addition, the demographic dividend is expected to peak in 2030, when the working-age population will account for 68% of the total population.

To do this, Indonesia must be able to use all means and maximize all potential to achieve continued growth, including digital transformation in the economic and financial sectors.

Digital transformation should continue to be strengthened to accelerate growth in all sectors of the economy, including micro, small and medium enterprises (MSMEs).

The digitalization of production, marketing and payment processes will boost the development of MSMEs at both the national and global levels. In this context, digital transformation must be done inclusively and fairly so that everyone has equal opportunities and is supported by consumer protection.

Digital Payments

BI believes that payment digitization will develop faster in the future for three reasons: Millennials, Generation Z and Generation Alpha are more involved, they have stronger digital awareness, and cross-border payment connectivity continues to increase.

It is expected that the flow of digital payment transactions will grow rapidly in the future, in line with the international commitment to improve the efficiency of cross-border payment services.

Perry Warjiyo, governor of Bank Indonesia, said the challenge could be met by building a resilient national payments system.

Based on the five visions of Indonesian Payment System (SPI) 2030, which are translated into five major initiatives, BSPI 2030 is committed to building a resilient and unified national payment system, which is a necessary condition for achieving end-to-end national digital economy and financial integration.

The five visions of 2030 BSPI are: First, 2030 SPI supports the financial integration of the national digital economy, ensures the functions of the central bank in the process of money circulation, monetary policy and financial system stability, and encourages financial inclusion.

Second, the 2030 strategic plan supports the digitalization of banks as the main institutions of digital finance and economy through open banking and the use of digital technologies and data in financial services.

Third, 2030SPI ensures the interconnection and interoperability between fintech companies and banks and avoids shadow banking risks through digital technology configuration (such as API), business cooperation, and company shareholding.

Fourth, ensure a balance between innovation and consumer protection, integrity and stability, and healthy business competition by implementing Know Your Customer (KYC) and Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT).

Fifth, the 2030 SPI guarantees the national interests of countries in digital finance and economy through the obligation to process all domestic transactions domestically and the cooperation between domestic and foreign suppliers, taking into account the principle of reciprocity.

The SPI Vision 2030 will be achieved through five 4I-RD (Infrastructure, Industry, Innovation, International and Digital Rupee) initiatives, including infrastructure initiatives towards preparing a resilient and integrated digital economy and financial infrastructure.

Infrastructure preparations are being undertaken by strengthening the stability, scalability and synergy of the retail payment system infrastructure, developing the BI Payment Clear system to enhance risk management and meet transaction integrity, developing the third generation BI-RTGS system, and developing data infrastructure by developing payment ID, data capture system and BI-Payment Info.

Industry initiatives aim to achieve structural consolidation by arranging entry policies according to the risk profile of participants, strengthening risk management and regulatory reforms. Structural consolidation is needed to enhance the industry’s risk control capabilities while strengthening competitiveness.

In addition, the Innovation Program works to ensure a balance between innovation and consumer protection, integrity and stability, and healthy and collaborative business competition.

These goals will be achieved through three policies: encouraging innovation in payment services, including the establishment of the Bank Indonesia Digital Innovation Center (BI-DIC); improving digital literacy and adoption in the community; and strengthening consumer protection.

The international initiative aims to safeguard national interests and expand payment connectivity between countries by expanding cross-border QRIS cooperation and the interconnection of retail and wholesale payment systems.

The Digital Rupee initiative aims to empower through experiments with digital securities for various financial market use cases.

Overall, BSPI 2030 will bring about a better and fairer future for the next generation of Indonesians. A smooth payment system and a well-functioning monetary and financial system stability will serve as the foundation for sustainable economic growth.

In addition, BSPI 2030 will encourage Indonesia to vigorously promote structural economic reforms and achieve digital transformation, integrating the participation of all economic players (regardless of size), central and regional levels into an inclusive digital economy and financial ecosystem.

As a result, the digital transformation of the country’s digital economy and finance can progress faster, surpassing the progress of the past five years and making a significant contribution to Indonesia’s future economic progress.

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