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The U.S. has labeled Indonesia’s Quick Response Code Indonesian Standard (QRIS) a trade barrier, primarily due to concerns about a lack of transparency and consultation with U.S. companies during its development, as well as perceived restrictions on foreign ownership and data access within Indonesia’s broader National Payment Gateway (GPN).
Here’s what’s next for Indonesia’s digital payment system:
1. Continued Dialogue and Negotiation:
* Indonesia’s openness to cooperation: Bank Indonesia (BI), the central bank, has stated its readiness to cooperate with the U.S. on QRIS, emphasizing that Indonesia doesn’t discriminate against partner countries. They are open to discussions and finding common ground.
* Bilateral discussions: The U.S. and Indonesia are engaging in further trade discussions, with non-tariff barriers like QRIS and digital trade being key topics. Indonesia aims to complete these discussions within two months.
2. Strengthening its Stance on Digital Sovereignty:
* QRIS as a strategic asset: Indonesia views QRIS and the GPN as crucial for achieving digital sovereignty, enhancing financial inclusion (especially for MSMEs), and promoting economic growth. They see it as a “frugal innovation” that has significantly boosted cashless transactions and reduced dependence on foreign payment networks.
* Regional interoperability: Indonesia is actively expanding QRIS interoperability with other Southeast Asian countries (Singapore, Malaysia, Thailand) and plans partnerships with Japan, India, South Korea, China, and Saudi Arabia. This regional integration strengthens its position and reduces reliance on global players.
3. Potential Adjustments and Defenses:
* Transparency and regulatory refinements: While asserting QRIS’s compliance with global standards, Indonesia may need to demonstrate greater transparency in its regulatory processes and perhaps refine certain frameworks to address U.S. concerns about foreign company engagement.
* Innovation from foreign companies: Indonesia suggests that foreign companies can innovate to align their services with QRIS rather than forcing Indonesia to adopt global standards.
* No prohibition on foreign use: Indonesia highlights that U.S. companies and citizens are not prohibited from using QRIS, and companies like Mastercard and Visa can develop APIs or partner locally to connect to the GPN.
* Focus on domestic adoption: QRIS has seen massive domestic adoption and growth, indicating its strong internal momentum regardless of external pressures.
4. Continued Growth of Digital Payments:
* Robust market growth: Indonesia’s digital payments market is projected for significant growth, driven by increasing internet penetration, smartphone usage, a booming e-commerce sector, and government initiatives.
* E-wallets and BNPL: Digital wallets remain the preferred payment method, with “Buy Now, Pay Later” (BNPL) solutions also gaining traction.
* Expanding digital financial services: Digital payment providers are expected to expand beyond traditional payments to offer more comprehensive financial solutions like savings, investments, and insurance.
In essence, while the U.S. designation of QRIS as a trade barrier presents a challenge, Indonesia is likely to defend its policy as a matter of digital sovereignty and financial inclusion. The next steps will involve continued diplomatic engagement, potential minor adjustments to address U.S. concerns without compromising its core objectives, and a continued push for the domestic and regional expansion of its digital payment ecosystem.

Video courtesy of Eurex

Video courtesy of Eurex