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🇮🇩 Indonesia /Economy & Trade

Bank Indonesia launches domestic credit card to boost payment system independence

From Republika · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Bank Indonesia has launched the Indonesian Credit Card (KKI), processed domestically via the National Payment System Infrastructure.
  • KKI aims to be a fast, easy, cheap, secure, and reliable domestic deferred payment instrument, distinct from international cards like Visa and Mastercard.
  • While KKI offers benefits like merchants absorbing QRIS transaction fees, its international network is currently limited, though it's seen as a crucial step for Indonesia's payment system independence.

Bank Indonesia (BI) has introduced the Indonesian Credit Card (KKI), a new domestic deferred payment instrument designed to enhance the nation's payment system independence. Unlike international credit cards such as Visa and Mastercard, the KKI is processed entirely within Indonesia through the National Payment System Infrastructure.

KKI was developed to provide a domestic deferred payment instrument that is fast, easy, cheap, secure, and reliable.

— Ryan RizaldyExplaining the core purpose and benefits of the Indonesian Credit Card.

Ryan Rizaldy, Head of BI's Payment System Policy Department, described the KKI as a tool developed to be fast, easy, cheap, secure, and reliable. The primary distinction from international cards lies in the transaction processing. While international cards rely on global networks, the KKI leverages domestic infrastructure, aiming for greater efficiency and security within Indonesia.

The main difference lies in the transaction processing scheme. KKI is processed domestically through the National Payment System Infrastructure. Meanwhile, international principal credit cards use the processing scheme of international principals.

— Ryan RizaldyDetailing the key operational distinction between KKI and international credit cards.

A notable advantage for users is the handling of Merchant Discount Rate (MDR) fees for QRIS transactions. Under the KKI system, these fees are borne by the merchant and cannot be passed on to the consumer. For financing costs, the maximum interest rate for KKI users will adhere to existing credit card regulations.

I see KKI as a complement to the ecosystem that strengthens the independence and resilience of Indonesia's payment system.

— Piter Abdullah RedjalamAssessing the strategic importance of KKI for Indonesia's financial infrastructure.

Piter Abdullah Redjalam, Director of Policy and Program at the Prasasti Center for Policy Studies, views the KKI as a vital component in strengthening Indonesia's payment system. He noted that domestic processing makes transactions more efficient and secure. However, he acknowledged a current limitation: the KKI lacks an extensive international network. Despite this, Redjalam considers the launch a necessary and important initial step toward greater financial self-reliance.

The weakness is that KKI does not yet have a wide network abroad. But this is a necessary first step.

— Piter Abdullah RedjalamIdentifying a current limitation of KKI while emphasizing its foundational role.
DistantNews Editorial

Originally published by Republika in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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