INDONESIAFINTECH LANDSCAPE REPORT MAY 2018 fintechnews.sg facebook/FintechIndonesia/Powered by: INDONESIA STATISTICSPowered by: POPULATION261.12 MillionBANKED POPULATION48.9%INTERNET PENETRATION143.2 MillionACTIVE SOCIAL MEDIA USERS 130 Million70%MOBILE30%DESKTOPURBAN 72.4% SEMI-URBAN 49.4%RURAL 48.2% GDP GROWTH5% per annumBORROWED FROM FINANCIAL INSTITUTION 17.2%MOBILE SUBSCRIPTIONS415.7 MillionSources: World Bank, the Association for Internet Service Providers Indonesia and We are Social INDONESIA STATISTICSPowered by: Total value of disclosed Fintech investment (2017) USD $176.75 MillionTransaction value in the Fintech market (projected 2018) USD $22,338 MillionTransaction value expected to show a growth rate of16.3% annually Sources: Daily Social and StatistaFintech Indonesia Players Overview Powered by: Payment38%Lending31%Personal Finance 2. Business intelligence unit providing Fintech companies with the latest economic data;3. Assessing the potential, benefits and risks of Fintech services; and 4. One-stop shop for companies that need details on government policies. Recent Developments in the Regulatory EnvironmentPowered by: Recent Developments in the Regulatory EnvironmentNational Payment GatewayDecember 2017 Bank Indonesia (BI) launched the National Payment Gateway (NPG): A system which provides a shared payment infrastructure and creates a nationally integrated electronic payment channel, lowering cashless transaction costs for the public. The National Electronic Transaction Provider (NETP) Consortium is made up of four interbank switching companies: PT Artajasa Pembayaran Elektronis, PT Rintis Sejahtera, PT Alto Network and PT Jalin Pembayaran Nusantara.Four main e-money issuers PT Bank Mandiri, PT Bank Central Asia (BCA), PT Bank Rakyat Indonesia (BRI), and PT Bank Negara Indonesia (BNI) have already signed an agreement for their e-money interoperability.March 2018 Preparations for launch of NPG second phase announced. Transaction standards have been established in preparation for: 1. Implementation of Multi-Lane Free Flow system on toll roads; and 2. Providing payment facilities for 20 main utilities, including electricity and phone bills. Powered by: Fintech Regulation December 2017 Bank Indonesia (BI) introduces Fintech regulation (Reg 19/12 2017) designed to support innovation while maintaining customer protections and financial stability. Requires Fintech providers to register with BI unless providers already registered with OJK supervision, namely P2P lending services. Key Components Scope and characteristics of Fintech activities to which rules apply. Regulatory sandbox. Procedures for registration with BI. Prohibits the use of cryptocurrencies as a payment tool, but does not regulate activities such as bitcoin mining and trading. Recent Developments in the Regulatory EnvironmentRecent Developments in the Regulatory EnvironmentPowered by: Regulatory Sandbox April 2018 BI approves Toko Pandai for its regulatory sandbox 15 other services providers have registered to join the BI regulatory sandbox: Cashlez Mpos Pay by QR Bayarind Payment Gateway YoOk Pay Halo Money Saldomu Disitu PajakPay Wallezz Lead Generation Netzme Mareco Pay iPayMu Criteria to make use of Fintech Regulatory Sandbox: 1. Development of innovative technology; 2. Potential to disrupt/affect existing financial products, services, technologies and/or financial business models; 3. Offers a benefit to customers; 4. Capacity for widespread use B2B providing digital financial products to retailersRecent Developments in the Regulatory EnvironmentPowered by: 2016 OJK Regulation on Financial Technology-based Lending Services No. 77/POJK.01/2016 Defines P2P lending services as financial services which are provided via online systems which facilitate meetings between leaders and borrowers for the purpose of entering into loan agreements in the Indonesian Rupiah currency. Rules for Registration Providers must be an established legal entity Maximum 85% of direct or indirect foreign ownership IDR 1 Billion in capital at the time of registration and IDR 2.5 Billion at the time of licensing Prohibited from conducting other services outside P2P services e.g. securities or guarantees