On Monday, CNBC reported that the Bank of Indonesia (BI) launched a new national card payment system as part of the nations’ broader strategy to reduce its reliance on foreign financial systems to protect its national economy from disruptions due to geopolitical disagreements.
The outlet reported that that the new system will be based on the nation’s interbank system, and be called Gerbang Pembayaran Nasional (GPN) or the National Payment Gateway. It will be designed for state institutions or companies, and will replace the currently used Visa and Mastercard systems. It will be designed to minimize the roles played by foreign payment providers and offer the nation more autonomy over its payment infrastructure.
The head of the Payment System Policy department at BI, Dicky Kartikoyono, said that the domestic cards will process user’s private data within the nation, without charging them any fees to access the system.
Kartikoyono also pointed out that the card will contain additional features allowing it to conduct payments for government institutions, such as for budget spending on inventories, rent, building maintenance, and official travel.
He added, “We are launching a government payment card, which we are calling the Indonesian credit card. It will facilitate the use of the budget in an efficient manner and provides various opportunities that will encourage medium and small businesses.”
Indonesian President Joko Widodo has implored regional authorities to begin transitioning away from foreign payment systems, and move towards locally-issued systems, offered by local banks. In the process he emphasized that Indonesia needs to shield itself from any potential geopolitical fallout, pointing to the sanctions which Western powers have used to target the Russian financial sector in retaliation for the war in Ukraine.
Dodit Proboyakti, a board member of the Indonesian Credit Cards Association (AKKI), said in March that Indonesia would be utilizing the working knowledge Russia gained in creating its Mir payment system to advance the development of its own financial network.
Russia developed its own national card system, called the Mir system, following the imposition of the first round of sanctions by the West on Moscow in 2014, launched in response to the annexation of the Crimean peninsula. Russia created the domestic National Payment Card System (NSPK) to replace the Visa and Mastercard systems, in the event the US-based companies decided to withdraw entirely from Russia.
