The Role of Government as a Regulator in Responding to the Development of Financial Technology: Dynamics of Payment Regulations through the Quick Response Code Indonesia Standard (QRIS)

From                    : A.M Oktarina Counsellors at Law

Contributors      : Aflah Abdurrahim, S.H., Pramudya Yudhatama, S.H., Khaifa Muna Noer Uh’Dina, S.H., Raysha Alfira, S.H., Putri Shaquila, S.H.

Reviewer             : Noverizky Tri Putra Pasaribu, S.H., L.L.M (Adv).

A.  Background

The development of banking information technology from year to year is increasingly rapid, that causes business actors to readjust and know the needs of the community as consumers in making payment methods or transactions that may also provide benefits to business actors or merchants themselves. Seeing the growing trend at this time, it is common to find entrepreneurs  or Marketplaces starting to switch from a manual payment system to using an internet-based payment system or may be called Quick Response Code Indonesian Standard (“QRIS”) as a payment method that is currently being widely used. Recently, there has been an event that there is a recent policy issued by Bank Indonesia regarding the QRIS Merchant Discount Rate (“MDR“)  tax rate for Merchants or Small Business where previously the fee charged to the payment provider was 0% to 0.3% and other transactions 0.7% effective from July 1^st, 2023, (as the attached link) no fees are charged for Merchants or small business that choose to use the QRIS payment method in running their business. Therefore, this also has an impact on small business that use QRIS as a payment method, so what is the government’s role in responding to technological developments related to payment regulations through QRIS? This needs to be further reviewed in the perspective of the positive law that governs it.

B.  Legal Basis

1. Law Number 7 of 2011 concerning Currency (“Law 7/2011“)
2. Financial Services Authority Regulation Number 13/POJK.02/2018 of 2018 concerning Digital Financial Innovation in the Financial Services Sector (“POJK 13/POJK.02/2018“)
3. Bank Indonesia Regulation Number 23/6/PBI/2021 concerning Payment Service Providers (“PBI 23/6/2021“)
4. Bank Indonesia Regulation No. 22/23/PBI/2020 concerning Payment System (“PBI 22/23/PBI/2020“)
5. Regulation of Members of the Board of Governors Number 21/18/PADG/2019 concerning the Implementation of the National Quick Response Code Standard for Payments (“PADG 21/18/2019“)
6. Board of Governors Regulation Number 24/1/PADG/2022 concerning the Second Amendment to Board of Governors Regulation Number 21/18/PADG/2019 concerning the Implementation of the National Quick Response Code Standard for Payments. (“PADG 1/24/PADG/2022“)

In general, transactions used by the public are using money with cash payment methods, and there is also a “transfer” payment method where it is the activity of sending money with a certain nominal from one account to another to make it easier if you want to make transactions. That it is necessary to know in advance about the definition of money itself that is used as a means of transaction that has been explained based on Article 1 number 2 of Law 7/2011 that reads:

• “Money is legal tender”

With the dynamics that occur, there is a shift in the selection of payment systems made by business actors or merchants after the QRIS system. In the prevailing regulations, Bank Indonesia acts as a supervisor for Payment Service Providers (“PJP”). This may mean that it is an institution that provides and facilitates QRIS payment methods, as defined in Article 1 point 4 of PBI/23/6/2021 that reads:

“Payment Service Providers, hereinafter abbreviated as PJP, are Banks or Non-Bank Institutions that provide services to facilitate payment transactions to service users”.

With the implementation of the QRIS payment system in the policy issued by Bank Indonesia, that may provide convenience to business actors, both merchants and the public as consumers in making purchase transactions. We need to know the meaning of the Quick Response Code that has been regulated in Article 1 number 4 PADG 21/18/2019 that reads:

“Quick response code for payment, hereinafter referred to as payment QR Code, is a two-dimensional code consisting of three square pattern markers in the lower left corner, upper left corner, and upper right corner, has a black module in the form of square dots or pixels, and has the ability to store alphanumeric data, characters, and symbols, which are used to facilitate contactless payment transactions through scanning”

In addition, there is also a definition of QRIS used in Indonesia that is regulated in Article 1 number 5 PADG 21/18/2019 that reads:

“Quick response code Indonesia standard” hereinafter referred to as QRIS is a payment QR code standard set by Bank Indonesia to be used in facilitating payment transactions in Indonesia”.

With the shift in the use of payment methods using Internet Payment Digital, it will provide new added value in the financial services sector that has been explained in Article 1 number 1 POJK 13 / POJK.02 / 2018 that reads:

   “Digital Financial Innovation, hereinafter abbreviated as IKD, is an activity to update business processes, business models, and financial instruments that provide new added value in the financial services sector by involving the digital ecosystem.”

Regarding the nominal QRIS transaction itself, there is also a nominal limit for the use of the QRIS payment method set by Bank Indonesia itself, that is a maximum of Rp. 2,000,000.00 (two million rupiah) and there is also a determination of the cumulative nominal limit as explained in Article 8 paragraphs (1), (2) and (3) of PADG 21/18/2019, but at present, Bank Indonesia has issued  PADG 24/1/PADG/2022 with the latest provisions with a minimum limit of IDR 10,000,000.00 (ten million rupiah) per transaction. This is stated in Article 8 of PADG 24/1/PADG/2022. Then in practice we are general with the phrase Merchant Discount Rate, that by definition has the meaning of the tariff charged to merchants by banks. The amount of MDR and distribution of MDR will be determined separately by Bank Indonesia.

MDR is an obligation paid by merchants so that it is not allowed to be charged to consumers who have the potential to cause an increase in the price of products or services. On March 1^st, 2021, there is the implementation of the Chip-Based Electronic Money MDR payment scheme, namely with the implementation of EU Chip Based MDR that consists of 2 schemes, including:

• 5% for regular transactions and
• 0% for G2P/P2G transactions (social assistance, tax payments, passports, and donations (non-profit) based on knowledge base KA-01029 BI.(as the link attaches)

Meanwhile, there is an updated policy based on the Bank Indonesia Board of Governors Meeting (RDG) on July 1^st, 2023 regarding the nominal MDR QRIS for micro business merchants to 0.3%. (as the link attaches).

In the dynamics of society that faces advances in financial transaction technology carried out, entrepreneurs and merchants must comply related to business operations by using policies that have been regulated in Articles 31 – 34 of Chapter XI concerning Consumer Education and Protection POJK 13/2018 that reads:

Article 31:

• The organizer must apply the basic principles of:

Consumer protection is:

1. Transparency
2. fair treatment
3. Reliability
4. confidentiality and security of consumer data/information and
5. Handling complaints and resolving consumer disputes in a simple, fast, and affordable cost

• The operator must provide a technology-based customer service center

• Technology-based customer service centers consist of at least providing customer service centers that can be carried out alone or through other parties.”

Article 32 :

• Organizers are required to provide and/or submit updated information to the Financial Services Authority and Consumers regarding digital financial service activities

• The information referred to in paragraph (1) is set forth in documents or other means that can be used as evidence.”

Article 33 :

• The operator must inform consumers about the receipt, delay or rejection of applications for digital financial services.”

• In the event that the organizer submits information on postponement or rejection as referred to in paragraph (1), the organizer must submit the reason for the delay or refusal.

Article 34 :

“Organizers are obliged to carry out activities to improve financial literacy and inclusion”.

Based on our discussion above, of course, the QRIS system is fully supported by Bank Indonesia. However, in practice, it needs optimal adjustment and supervision. Not only that, service providers and providers also have the responsibility to educate and provide understanding to consumers.

C.  Conclusion

 The QRIS regulation is a comprehensive and accommodating framework for digital payments. However, its effective implementation requires the understanding and synergy of all stakeholders. This is necessary to mitigate any potential issues that may arise in the implementation of QRIS.

D.  References

• https://bisnis.tempo.co/read/1746132/meski-tak-masalah-dengan-pajak-qris-03-persen-pengusaha-warteg-lebih-pilih-pembayaran-tunai
• https://bicara131.bi.go.id/knowledgebase/article/KA-01029/en-us
• https://www.bi.go.id/id/publikasi/ruang-media/news-release/Pages/sp_2516523.aspx

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