Navigating Indonesia’s Payment Service Provider Framework

Indonesia’s payment regulatory framework is moving toward a more activity-based and supervisory-driven approach under Bank Indonesia Regulation No. 10 of 2025 (“PBI 10/2025”) and Regulation of the Members of the Board of Governors No. 32 of 2025 (“PADG 32/2025”).

For businesses exploring Indonesia’s payment sector, the regulatory analysis increasingly extends beyond the question of which licence is required. The structure of the payment activities, the allocation of responsibilities within the business ecosystem, operational readiness, and the integration of payment functionality into broader services may also become relevant to how the business is assessed by Bank Indonesia.

1. The Shift Toward Activity-Based Assessment

A key development under PBI 10/2025 is the introduction of Activity Bundling, which classifies payment activities according to the nature of the services being performed.

At a broad level, the framework covers activities involving the administration of fund sources, payment transaction processing, and the forwarding of fund transfer instructions.

The framework is divided into Activity Bundling 1, Activity Bundling 2, and Activity Bundling 3, each covering different payment activities and carrying different regulatory implications.

Activity Bundling 1 covers administration of fund sources and payment transaction processing. Administration of fund sources includes the administration of payment accounts and the issuance of, or provision of access to, sources of funds. Payment transaction processing includes the forwarding of payment transaction data and payment instructions, which may be accompanied by facilitating the receipt of payment proceeds through sub-accounts provided to goods and/or services providers, as well as forwarding fund transfer instructions through digital and non-digital means.

Activity Bundling 1 is further divided into Bundling 1A, which is available only to Main PSPs, and Bundling 1B, which may also be undertaken by PSPs other than Main PSPs.

Activity Bundling 2 covers payment transaction processing activities involving the forwarding of payment transaction data and payment instructions, which may be accompanied by facilitation of payment proceeds, as well as the forwarding of fund transfer instructions through digital and non-digital means.

Activity Bundling 3 covers payment transaction processing involving the forwarding of fund transfer instructions through non-digital means.

The practical consequence is that businesses with similar commercial offerings may nevertheless face different regulatory considerations depending on how their transaction flows are structured, how responsibilities are allocated between parties, and how payment functionality is integrated into the wider service.

The relevant analysis therefore increasingly concerns the substance of the payment activities being conducted rather than the commercial description of the product alone.

2. Minimum Paid-Up Capital Requirements

The activity-based framework is also reflected in the minimum paid-up capital requirements applicable to PSPs.

Under PBI 10/2025 and PADG 32/2025, PSPs under Activity Bundling 1 are required to have minimum paid-up capital of IDR 15 billion, while PSPs under Activity Bundling 2 are required to have minimum paid-up capital of IDR 5 billion.

For Activity Bundling 3, the minimum requirement depends on the role of the PSP. A PSP that provides a system that may be used by other PSPs under Activity Bundling 3 is subject to a minimum paid-up capital requirement of IDR 1 billion. A PSP that does not provide such a system is subject to a minimum requirement of IDR 500 million.

These requirements make the classification of a proposed payment activity relevant not only from a licensing perspective, but also from an initial capital and business structuring perspective.

3. TIKMI and Bank Indonesia’s Supervisory Assessment

Another important element of the framework is TIKMI, which assesses five areas:

• Transactions;
• Interconnection;
• Competence;
• Risk Management; and
• Information Technology Infrastructure.

TIKMI forms part of Bank Indonesia’s broader supervisory framework and may be used in connection with licensing, PSP classification, approvals, participation in payment system infrastructure, implementation of payment-system obligations, supervision, and consideration of the termination of payment-system implementation.

Before Bank Indonesia conducts its assessment, a PSP is required to conduct a self-assessment and inform Bank Indonesia of its fulfilment of the relevant TIKMI requirements.

The self-assessment forms part of the PSP’s internal responsibility and oversight. It does not, however, replace Bank Indonesia’s authority to independently assess the PSP and determine the relevant TIKMI assessment result.

Under PADG 32/2025, TIKMI may be used, among other purposes, in assessing PSP licensing requirements, determining whether a PSP falls within the Main PSP or PSP other than Main PSP category, considering approval of the Payment System Business Plan (“RBSP”), assessing proposed activity and product development or cooperation, evaluating fulfilment of payment-system obligations, determining access requirements for participation in payment-system infrastructure, and determining the form and scope of supervisory follow-up.

The framework therefore places operational capability, governance, transaction arrangements, risk management, and technology infrastructure within the broader regulatory assessment.

4. Licensing and Operational Alignment

The activity-based approach does not replace the core licensing and governance requirements applicable to PSPs.

Licensing, governance, ownership considerations, and operational oversight remain relevant under PBI 10/2025. At the same time, the framework places greater emphasis on the PSP’s business planning and the regulatory treatment of future developments.

Two planning instruments are particularly relevant: the Strategic Business Plan (“SBP”) and the Payment System Business Plan (“RBSP”).

The SBP establishes the PSP’s strategic direction and medium-term business strategy and is submitted to Bank Indonesia every three years. The RBSP operates as an annual planning document and provides the basis for planned cooperation arrangements and other key business developments.

The distinction is therefore primarily one of planning horizon: the SBP sets the medium-term strategic direction, while the RBSP addresses the PSP’s planned developments on an annual basis.

5. Approval for Activity, Product and Cooperation Development

The framework also places regulatory significance on the way PSPs develop their activities, products, and cooperation arrangements.

Under PBI 10/2025 and PADG 32/2025, PSP development activities may include developments affecting the stages of payment transaction processing, including initiation, authorisation, clearing, and settlement. Development may also occur during the pre-transaction and post-transaction stages.

Depending on the nature of the proposed development, the PSP may be required to obtain approval from Bank Indonesia or submit a development plan to Bank Indonesia.

This means that product expansion cannot necessarily be assessed solely as a commercial or technological decision. Where a proposed development changes the payment function performed by the PSP or affects the relevant payment-processing stages, the regulatory implications should be considered as part of the product-development process.

6. Why Early Structuring Matters

The increasing focus on the substance of payment activities makes early regulatory structuring particularly relevant for businesses entering or expanding within Indonesia’s payment sector.

The initial design of a business model may affect the applicable Activity Bundling classification, capital requirements, licensing pathway, and subsequent requirements for product or cooperation development.

The same consideration applies to businesses that incorporate payment functionality into a broader digital or commercial ecosystem. The regulatory analysis may depend on the actual transaction flow, the party performing each function, the interaction between systems, and the allocation of responsibilities between the relevant entities.

For this reason, businesses may need to consider regulatory structuring before finalising the commercial and technical architecture of a payment-related product.

7. Strategic Considerations for Businesses

Indonesia continues to develop its payment-system infrastructure, creating opportunities for businesses involved in payment services and digital transaction ecosystems.

At the same time, the framework under PBI 10/2025 places greater emphasis on the relationship between the licensed activity and the way that activity is actually implemented.

For businesses entering the market, the regulatory assessment may therefore need to address not only whether the proposed activity falls within a particular payment-service category, but also whether the proposed governance, transaction architecture, technology infrastructure, risk-management arrangements, and business-development plans remain aligned with Bank Indonesia’s requirements.

For existing PSPs, the same considerations become relevant when expanding products, entering into new cooperation arrangements, or modifying existing payment-processing arrangements.

Conclusion

PBI 10/2025 represents a move toward a more activity-based and supervisory-driven approach to Indonesia’s payment-system regulation.

The introduction of Activity Bundling provides a framework for classifying PSP activities according to the substance of the payment services being performed, while TIKMI provides Bank Indonesia with a broader basis for assessing transactions, interconnection, competence, risk management, and information technology infrastructure.

Against this background, regulatory structuring is increasingly relevant not only at the licensing stage, but throughout the lifecycle of a payment business. The way a payment activity is structured at the outset may affect its classification, capital requirements, scalability, product development, and operational flexibility as the business evolves.

This alert is part of a series examining recent developments in Indonesia’s financial services and payment-system regulatory framework. Please feel free to contact us should you wish to discuss these developments further.

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