Bank Indonesia (BI), Indonesia’s central bank, last week launched BI-FAST, the archipelago’s first national digital payments infrastructure designed to expedite retail payments in real-time, 24/7 in an efficient and secure manner.
BI-FAST is developed to meet the public demand for fast and efficient money transfer services that operates around the clock. Currently, the National Clearing System (SKNBI) cannot fully meet the demand due to the finite window time, lack of real-time effective funds and limited payment channels – which defeats the goal to deliver the convenience of cashless transactions.
Indonesia is the latest in a series of Southeast Asian countries to upgrade its national payments infrastructure to drive digital economies and accelerate growth. As legacy payment systems continue to impede mature market innovation, the region’s countries are leapfrogging increasingly outdated technology and leveraging strong domestic central infrastructure as the foundation for real time digital and cross-border payments.
BI-FAST is an integral part of Indonesia’s ongoing digital modernization initiative and central to its Payment System Blueprint, IPS 2025. IPS 2025 aims to transform the country’s payment infrastructure, integrate its digital economy, and finance sector.
BI has developed BI-FAST with the help of real-time payments provider ACI Worldwide, implementing the national infrastructure in less than nine months – one of the fastest countrywide implementations on record. When complete, the vast undertaking will incorporate 135 banks, as well as merchants and payment service providers, making it one of the world’s largest real-time payments initiatives.
“ACI is proud to help drive BI-FAST and Indonesia’s bold payment transformation,” said Leslie Choo, managing director – APAC, ACI Worldwide. “Together, ACI and Bank Indonesia have created one of the most secure and future-proof real-time payment systems in the world, one that will help accelerate Indonesia’s digital economy and bring millions of unbanked citizens into the formal financial sector.”
Phase one of the national initiative is already live with more than twenty banks across the country, providing participating institutions with access to a series of key services including:
- 24/7 real-time credit transfers with real-time transaction settlement at bank & customer level
- Unique identifiers (proxy addresses) to simplify, secure and facilitate payments
- Integrated real-time fraud detection
According to Choo, ACI’s Low Value Real-Time Payments technology drives BI’s central infrastructure hub, which allows more than one hundred payment scheme players to connect. ACI also provides immediate access to the core real-time infrastructure, laying the foundation for future services such as Request to Pay (R2P), eMandates, direct debit, and cross-border payments
“Delivering a national central infrastructure of this size and complexity from scratch, while simultaneously supporting the go live of over 20 banks in less than nine months, is no easy undertaking. It is testament to the dedication and commitment of all involved to Indonesia and its digital future,” added Choo.
Digital payments have gained considerable traction in Indonesia and are in regular use by more than half (55%) of the country’s consumers. The rapid growth over the past year highlights Indonesia’s dramatic shift towards digital payments due to the pandemic. The government now anticipates even greater adoption with real-time payments, and a further boost to its digital economy ambitions.