QR Code Indonesian Standard (QRIS)

Definition

In general, QR Code is a type of two-dimensional barcode made up of three black squares arranged in a square grid around the bottom left, top left and top right corners of the barcode, and a module consisting of pixels, which can store alphanumeric data, characters and symbols, used to facilitate contactless payment transactions through scanning technology.

The Quick Response Code Indonesian Standard, usually abbreviated to QRIS, is a standardised QR Code that Bank Indonesia has approved for payments in Indonesia.

The salient difference between QRIS and the QR codes currently used by the industry is that all payment transactions can be facilitated by one QR code, namely QRIS, even when using different payment instruments. This is possible because each application of the respective payment instrument Issuer can scan and read QRIS in the QR code at any participating merchant.

Usage Models

QRIS accommodates two QR code usage models, namely Merchant Presented Mode (MPM) and Customer Presented Mode (CPM). Nevertheless, the models are implemented in reference to the QRIS standards set by Bank Indonesia as the national standard.

Parties Processing QRIS Transactions

In terms of processing QRIS transactions, the parties involved include Payment System Service Providers, Switching Institutions, Merchants, Aggregators and Managers of the National Merchant Repository. Front-end payment system service providers, such as issuers and/or acquirers can also process QRIS transactions.

Payment system service providers and switching institutions engaged in processing QRIS transactions are required to first obtain approval from Bank Indonesia.

Funding Sources of QRIS Transactions

QRIS transactions use funding sources in the form of deposits and/or payment instruments such as debit cards, credit cards and/or server-based electronic money. The use of funding sources and/or payment instruments is based on a proposal submitted by a Standard Setting Institution approved by Bank Indonesia.

Value of QRIS Transactions

QRIS transactions are restricted to a maximum value of Rp10 million per transaction. Furthermore, Issuers can enforce daily and/or monthly cumulative limits on QRIS transactions by user based on the risk management of the Issuer.

QRIS Regulations

The main regulation concerning QRIS implementation is Board of Governors Regulation (PADG) No. 21/18/PADG/2019 concerning National Implementation Standards of Quick Response Code for Payments. In addition, for specific provisions concerning which payment instruments can be used in QRIS transactions, Bank Indonesia also issued a regulation concerning card-based payment instruments and electronic money. In relation to the processing of QRIS transactions, refer to BI regulations concerning the processing of payment transactions (PTP), electronic money and the National Payment Gateway (NPG).

The Board of Governors Regulation on QRIS became effective upon enactment on 16th August 2019. Any party already using QR code prior to the enactment is required to adjust the usage model to QRIS no later than 31st December 2019.

The schemes and costs of processing QRIS transactions are determined by Bank Indonesia through a Deputy Governor Decree.

Benefits

For the end user, the main benefits include greater flexibility when seeking alternative sources of funds and/or payment instruments that can be used to make payments at merchants. For the merchant, QRIS is more practical because only one standardised QR code is required in order to accept payments from various different sources of funds and/or payment instruments. For the industry as a whole, QRIS supports interconnectedness and interoperability, thus minimising fragmentation and enhancing efficiency.

e-Wallet

Definition

A digital wallet, also known as e-wallet, refers to electronic services that store payment instrument data, including card-based payment instruments and electronic money, which can store funds to make payments.

e-Wallet Operators

e-Wallet Operators are payment system service providers licensed by Bank Indonesia.

e-Wallet Restrictions

The funds contained in e-Wallets are restricted to a total balance of Rp10 million.

Using Funds in e-Wallets

Funds contained in an e-Wallet can only be used for the following payments:

1. shopping transactions
2. paying utility bills

Funds contained in an e-Wallet are non-transferable to another e-Wallet.

Topping Up and Withdrawing e-Wallet Funds

e-Wallet funds can be topped up using cash, transfers or auto debits from the user's bank account or electronic money. Funds can only be withdrawn by transferring funds to the user's registered bank account or redeeming cash.

e-Wallet Regulations

Provisions regarding e-Wallets are contained within Bank Indonesia Regulation (PBI) No. 18/40/PBI/2016 and Bank Indonesia Circular Letter No. 18/41/DKSP concerning Payment Transaction Processing.

Payment Gateway

Definition

A payment gateway is an electronic service that allows merchants to process payment transactions using cards, electronic money and/or proprietary channels.

Payment Gateway Providers

Payment Gateway Providers are payment system service providers licensed by Bank Indonesia.

Payment Gateway Regulations

Provisions regarding Payment Gateways are contained within Bank Indonesia Regulation (PBI) No. 18/40/PBI/2016 and Bank Indonesia Circular Letter No. 18/41/DKSP concerning Payment Transaction Processing.

Switching

Definition

Switching refers to infrastructure that functions as a centre and/or provides routing services for payment transaction data through networks using card-based payment instruments, electronic money and/or funds transfers.

Switching Providers

Switching Providers are payment system service providers licensed by Bank Indonesia.

Switching Regulations

Provisions regarding Switching are contained within Bank Indonesia Regulation (PBI) No. 18/40/PBI/2016 and Bank Indonesia Circular Letter No. 18/41/DKSP concerning Payment Transaction Processing.

Proprietary Channel

Definition

A proprietary channel is a payment channel developed and owned exclusively by a Bank for the benefit of its own customers using SMS, mobile, web, subscriber identity module toolkit and/or unstructured supplementary service data technologies.

Proprietary Channel Operators

Proprietary channels operated by payment system service providers in the form of a Bank must be approved by Bank Indonesia.

Proprietary Channel Regulations

Provisions regarding Proprietary Channels are contained within Bank Indonesia Regulation (PBI) No. 18/40/PBI/2016 and Bank Indonesia Circular Letter No. 18/41/DKSP concerning Payment Transaction Processing.