Background

Indonesia payment systems have undergone decades of development responding to rapid market and technological changes, which is remarkable given the vast size of the country: 1.9 million square kilometers, coupled with a very large population, over 237 million people, more than 17.500 islands, 120 commercial banks and their 15.000 offices, 1.668 rural banks and 64 million ATM and Debit Cards, it mirrors the potential opportunities and challenges of payment system infrastructure development.

The growing popularity of electronic payment transaction has led Bank Indonesia (BI), the Central Bank of Indonesia which oversees all payment system in Indonesia, to take various actions in anticipation of this trend. One of the strategic moves has been to launch the EMV-based microchip credit card migration, and the “less cash society” initiative study in 2006, and then the initiative to develop and implement an industry standard of chip-card specification for ATM and Debit cards (SE BI No. 7/60/DASP, dated December 30th, 2005, SE BI No. 8/18/DASP, dated August 23rd, 2006, and SE BI No. 13/22/DASP dated 18 October 2011). The goal of these strategic initiatives is to foster the creation of a secure, efficient and more robust electronic payment system for the public.

In that role, the Central Bank has worked with banks (National Payment System Forum/FKSPN/ASPI), and they have assigned the three Principal companies, namely, PT Alto Network, PT Artajasa Pembayaran Elektronis, and PT Rintis Sejahtera in collaboration with 19 banks (Working Group) to coordinate and facilitate the development of the industry standard of technical specification for microchip-based ATM and Debit cards. In 2011 the three Principals had completed the industry standard development and proof-of-concept, which closely based on the Indonesia’s banking industry requirements and other relevant international standards. The development and proof-of-concept process are also undertaken by all stakeholders based on the Payment Industry Good Governance Principles : Certainty, Legitimacy, Transparency, Flexibility and Efficiency.

The certification process provided by CBI is mainly to support the implementation of the industry standard of chip-card specification for ATM and Debit cards as outlined in the SE BI 13/22/DASP. The certification process is intended to assure that cards, terminals and independent personalization centers comply with the requirements of the industry standard. The certification does not endorse, certify or approve the vendor supplying these cards, terminals and personalization centers. In addition, risk associated with such products and/or services must be assessed and contained.