At a glance
- Client: A Taiwan-based cross-border payments and remittance fintech
- Sector: Fintech / cross-border remittance
- Region: Indonesia (with East Asian corridors)
- Service: Regulatory and market-entry assessment
The challenge
The client planned to offer international money transfers into and out of Indonesia, for consumers and businesses alike (C2C, B2B and B2C). It wanted one licence that would cover both directions, so it could net inward flows from East Asian markets against outward flows and avoid holding large reserves. Before committing, it needed to know which regulator governs remittances in Indonesia, which licence category fits, how much capital is required, what share a foreign company may own, and what legal and operational duties come with the licence.
What we did
- Reviewed the Indonesian remittance market using Statista, industry reports and a 2021 consumer survey on remittance pain points.
- Mapped the roles of Bank Indonesia (payment-system regulator) and the Financial Services Authority (OJK).
- Read the 2020–2021 Bank Indonesia payment-system regulations, which reclassified fund-remittance operators as payment service providers (PJP), using published legal summaries from Indonesian law firms.
- Compared the three PJP licence categories by permitted activities, legal form and minimum paid-up capital.
- Set out PJP licensing requirements: ownership and control, management, capital, risk management and information-system capability.
- Listed adjacent obligations: personal data protection, electronic system operator (PSE) registration, consumer protection, tax and trademark registration.
- Covered practical set-up points: local director, office address, staffing and minimum wage.
Topics covered
- Inbound and outbound remittance market in Indonesia
- Bank Indonesia payment-system framework (PJP and PIP)
- PJP licence categories 1–3
- Foreign ownership and voting-share limits
- Fit-and-proper tests for shareholders and directors
- Data protection, PSE registration and consumer protection
- Local presence: director, office, staffing
What we delivered
A 12-slide English-language deck covering objectives, market overview, the regulatory landscape, PJP licence requirements, a side-by-side table of licence options, legal and operational considerations, strategic recommendations and a conclusion.
Indonesian remittance market and licensing deck
Slide deck · 12 slides
- Client objectives: one licence for inward and outward flows, and settlement netting
- Market overview: growth of inbound and outbound remittances, main corridors, consumer pain points
- Regulators and the PJP/PIP classification under the Bank Indonesia payment-system regulation
- PJP requirements: ownership and control, management, capital, risk management, IT capability
- Licence categories 1–3 compared by scope, legal form and minimum paid-up capital
- Legal and operational checklist and recommended route
What we found
- Fund-remittance operators now fall under Bank Indonesia's payment service provider (PJP) regime. The older remittance licensing provisions were revoked.
- Of the three PJP categories, Category 3 covers remittance services. It needs a PT (or other Indonesian legal entity) and minimum paid-up capital of IDR 500 million, or IDR 1 billion if other PJPs use the system. Categories 1 and 2 need IDR 15 billion and IDR 5 billion.
- For a non-bank PJP, at least 15% of all shares and 51% of voting shares must be held by Indonesian parties. Foreign parties may hold up to 85% of shares but no more than 49% of voting shares.
- At least one director must live in Indonesia. Bank Indonesia runs fit-and-proper tests on directors, commissioners and controlling shareholders.
- We recommended registering as a PJP and as an electronic system operator (PSE), applying for Category 3, appointing a local director, and setting up a physical or virtual office.
In numbers
- Inbound remittances to Indonesia grew 3.6% and outbound remittances 4.0% (Statista / GlobeNewswire, 2024).
- 70% of respondents named high costs and long transfer times as major obstacles, and 71% cited a lack of cost transparency (Jajak Pendapat survey, 2021).
- Indonesian migrant workers sent home IDR 77.35 trillion in Q2 2023.
- The Bank Indonesia PJP regulation has 276 articles in 11 chapters.
Key takeaway
In Indonesia, the voting-share cap and the local-director rule shape the company structure more than the capital requirement does, so settle them before you choose a licence category.