Indonesian President Joko Widodo, commonly known as Jokowi, recently expressed his desire for government credit cards to not rely on Visa and Mastercard services. However, this ambition is not yet supported by local credit card issuers.
Jokowi had previously wanted central and regional government spending to use credit cards, as has been launched a few months ago. However, he did not want to rely on Visa and Mastercard.
He emphasized the need for local independence in the payment system as demonstrated by Russia’s experience during the Ukraine conflict in February 2022, where the United States imposed sanctions on Russia, followed by its companies’ policies.
Thus, Indonesia must be self-reliant in the payment system. “If we can use our own platform and spread it starting from the national level, province, district, and city, we will be more at ease,” said Jokowi during the Domestic Product Business Matching Opening in Jakarta on Wednesday, March 15, 2023.
The day after Jokowi’s statement, Bank Indonesia confirmed that government credit cards would not use Visa and Mastercard but would use the national payment gateway (GPN), following President Jokowi’s directive.
“In accordance with President’s directive, domestic KKP indeed does not use Mastercard and Visa but uses GPN,” said Doni Primanto Joewono, Deputy Governor of Bank Indonesia in a press conference after the Board of Governors’ Meeting on Thursday, March 16, 2023.
It is reported that the physical form of the Domestic Government Credit Card (KKP) will be available in May 2023. The Domestic KKP will not use Visa and Mastercard but will use the national payment gateway (GPN).
Deputy Governor of Bank Indonesia Doni P Joewono said the process has reached 92% completion and an initial introduction will be done a month before it is officially issued.
As per Bank Indonesia’s official website, the Domestic KKP is a domestic payment scheme based on credit facilities to facilitate central and regional government transactions in the form of a government credit card that is domestically processed. Last year, the Domestic KKP still used a QRIS-based credit source mechanism, so all transactions were processed domestically.
Initially, the issuance of the Domestic KKP was carried out by HIMBARA, namely BNI, BRI, and Bank Mandiri, which will be gradually expanded to regional development banks (BPD). Then, in May of this year, the Domestic KKP will be issued in physical form.