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National Payment Gateway is the future of bank transactions in Indonesia

National Payment Gateway is the future of bank transactions in Indonesia

Bank Indonesia (BI)
has been campaigning actively for people to have their debit cards and
electronic money cards exchanged at their banks for the National Payment Gateway
(GPN) card. The card is identifiable with the symbol of the GPN program, the
logo of an eagle.

According to the report
made by the Ministry
of Communications and Informatics
, the GPN card allows customers to
perform transactions such as cash withdrawals from ATM machines and EDC devices
from banks other than their own, for a minimal additional cost. Before this
initiative, the debit cards issued by banks can only be used on devices from
the same bank.

GPN was launched late in 2017 with three
objectives to its implementation. They are:

(1) To create an interconnected ecosystem
of payment systems that has interoperability and is able to carry out
transactions including authorisation, clearing, and settlement.

(2) To improve consumer protection by
safeguarding data during each customer transaction.

(3) To ensure the availability and
integrity of the national payment systems transaction data in order to support
the effectiveness of monetary policy transmission, intermediation efficiency,
and financial system resilience.

One of the advantages of GPN is saving
costs on charges per transaction done on EDC devices, which totalled to US$
1.24 million (IDR 1.8 trillion) per year. GPN has also efficiently cut the
value of domestic payment transaction that had been carried out overseas.

Transaction costs incurred by foreigners
were reduced by US$ 1.2 million (IDR 17.7 billion) per day. Prior to the launch
of GPN, the average transaction value using debit cards that are either
MasterCard or Visa could reach US$ 1.72 million (IDR 25 billion).

Both merchants and customers have felt the
difference, which means more money for both. Traders are able to save money
because they no longer need to provide a lot of EDC machines by the cash
register because customers can now do transactions on EDC machines of any

From the period between October 2017 and
June 2018, 24 million transactions were recorded from GPN cards, with a
transaction value that reached US$ 799 million (IDR 11.58 trillion).

During that time, only 5 banks have the
appropriate infrastructure to implement GPN cards. At present, after almost a
year, there are already 60 banks that are connected to the National Payment

Data as of May 2018 shows that there were
937,000 printed GPN cards and 497,000 distributed GPN cards. The Bank of
Indonesia targets that by the end of 2018, 30% of the committed total GPN cards
will be completed.

Obtaining GPN debit cards are easy.
Customers need only to redeem the card from their banks. Existing debit card
holders can exchange their cards for a GPN card at exchange facilities
organised by the banks in public areas. Most importantly, exchanging of debit
card to GPN card is free of charge.

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