In 2019, Bank Indonesia (“BI”) issued Regulation No. 21/16/PBI/2019 (“Regulation 16/2019”) on the Standardization of Competencies Within the Field of Payment Systems (Standardisasi Kompetensi di Bidang Sistem Pembayaran – “SK SP”) and the Management of Rupiah. At its core, Regulation 16/2019 established various requirements and guidelines for banks (“Banks”) and non-banking institutions (lembaga selain bank – “LSB”) (Banks and LSB collectively referred to as “SK SP Operators”) that were aimed at enhancing competencies within the payment systems and rupiah management sector.[1]

However, recent challenges such as fraud, cybercrime, money laundering and terrorism financing, along with the need to align this framework with the mandate set out under Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector, (“Law 4/2023”) has prompted BI to issue Regulation No. 5 of 2024 (“Regulation 5/2024”) on SK SP.[2] Upon entering into force on 9 July 2024, the aforementioned new framework simultaneously repealed and replaced Regulation 16/2019.[3]

While maintaining most of the core provisions that were originally set out under Regulation 16/2019, Regulation 5/2024 notably makes several revisions, such as to the scope of payment system activities (“Activities”), the various qualification levels required for certain positions, the obligations of related parties, as well as new types of administrative sanctions that may be enforced for non-compliance. Moreover, Regulation 5/2024 has also simplified the terminology used, by omitting the management of rupiah (pengelolaan uang rupiah/PUR) from all of the relevant nomenclature. Specifically, SK SP Operators are now required to pay attention to all of the following new deadlines:[4]

Due to the broad scope of the various arrangements addressed under Regulation 5/2024, our discussion has been limited to the new provisions addressed therein, specifically the following related topics:

1. Adjusted Scope of SK SP and Obligated Parties;
2. Mandatory Certification;
3. Obligations of SK SP Operators; and
4. Expanded Administrative Sanctions.

Adjusted Scope of SK SP and Obligated Parties

At its core, Regulation 5/2024 introduces various adjustments to the scope of Activities. A comparison with the Activities addressed under the previous framework of Regulation 16/2019 is set out in the following table:[5]

(*) Regulation 16/2019 explicitly distinguishes between cash and non-cash payment systems, while Regulation 5/2024 does not.

In terms of obligated parties, Regulation 5/2024 newly categorizes the types of businesses under providers (penyelenggara SK SP – “SK SP Providers”) and SK SP Operators that are obligated to comply with SK SP regulations. These parties are summarized in the following table:[6]

Mandatory Certification

While both regulations mandate that SK SP Operators must ensure that certain employees in charge of Activities are in possession of Certificates, Regulation 5/2024 now specifies the various learning achievement levels within the payment system field that are equivalent to certain levels under the Indonesian national qualification framework (jenjang kualifikasi sistem pembayaran – “Qualification Levels”).[7] The updated positions and respective mandatory qualification levels are detailed in the following table:[8]

Maintaining the previous requirements set under Regulation 16/2019, the new framework also mandates that employees must secure Certificates within six months of the effective date of their appointment. These Certificates may only be obtained from LPK SP or LSP SP that have been officially acknowledged by BI.[9]

However, while professional certificates that are issued by foreign certification institutions and/or professional associations (“Foreign Certificates”) are still recognized through the principle of equivalency by LSP SP, changes have now been introduced to the relevant requirements under Regulation 5/2024, as summarized in the following table:[10]

Obligations of SK SP Operators

Similar to the previous framework of Regulation 16/2019, the new framework also mandates that SK SP Operators must ensure the continuous updating of payment system competencies among employees who already possess Certificates (“Maintenance”). However, it should be noted that Regulation 5/2024 newly stipulates that maintenance must be carried out at least once every three years.[11] Furthermore, Regulation 5/2024 reaffirms the obligation to maintain the data and information that features on Certificates. Said data includes:[12]

1. Employee data of employees who hold Certificates; and
2. Employee data of employees who have completed Maintenance.

In addition to the above-mentioned obligations, Regulation 5/2024 also introduces new provisions on funding for the development and strengthening of human resources. In essence, SK SP Operators are now required to submit funding provision plans based on needs assessments and their realization to BI for evaluation. Based on the results of said evaluations, said funding provision plans may require adjustments.[13]

Expanded Administrative Sanctions

In terms of cases of non-compliance, including the above-mentioned obligations, both regulations stipulate various administrative sanctions for SK SP Operators. However, it should be noted that Regulation 5/2024 has now expanded the various types of administrative sanctions that may be imposed, as outlined in the following table:[14]

Key Takeaways

By refining the scope of activities and enhancing the qualifications required for key positions within the industry, Regulation 5/2024 aims to ensure a swift, secure, cost-effective and reliable payment system. Along with broadening the types of sanctions and introducing a new obligation to draw up funding plans, Regulation 5/2024 underscores the importance of robust human resources in terms of tackling recent challenges that have emerged within the payment systems landscape. These measures should collectively contribute to the creation of a more resilient and efficient payment infrastructure, reflecting Bank Indonesia’s commitment to advancing the national financial sector and aligning it with contemporary demands and global standards.

source: hukumonline.com