Key Facts for Indonesia
- Primary real-time rails: BI-FAST, QRIS.
- Typical settlement times: Payments are processed in real-time.
- Common limits: The maximum per-transaction limit is IDR 250 million; daily aggregate limits vary by institution.
What “real-time payments” means in Indonesia
In Indonesia, real-time payments are transactions processed instantly, 24/7, through the BI-FAST system. This infrastructure facilitates immediate credit transfers between accounts, moving beyond the limited time windows of older systems. The scope is broad, initially covering individual transfers with plans to include bulk credit, direct debit, and request-for-payment services. While no formal legal definition is published, the system operates under a framework aiming to be “fast, cheap, affordable, easy, safe, and reliable,” a common structure for such national initiatives (industry norm).
Bank Indonesia, the country's central bank, is the lead regulator and operator of the BI-FAST system, directly overseeing its operation. While BI-FAST is the central infrastructure, it is supported by multi-tenant aggregators from national switches like Rintis Sejahtera, Artajasa, and Alto Network. These organizations act as vital intermediaries connecting participants. To ensure interoperability with domestic and cross-border payment systems, the entire framework is built upon the ISO 20022 messaging standard, which provides a modern, data-rich format for transactions.
Having been a late entrant, Indonesia has rapidly modernized its payments infrastructure, quickly becoming one of the world’s fastest-growing real-time payment markets.
Payment Rail Overview
BI-FAST
BI-FAST (Bank Indonesia Fast Payment) is the national infrastructure for retail payments, launched in December 2021. It operates 24/7, allowing for the immediate transfer of funds between participating banks and non-bank institutions. The system uses the ISO 20022 messaging standard to connect the entire payments ecosystem, from digital banking to e-commerce, and supports transfers via account number or proxy addresses like a phone number or email.
- Real-time, 24/7 processing: Transactions are settled instantly at any time, a significant upgrade from the previous system’s limited operational windows.
- Proxy addressing: Customers can initiate payments using a recipient's mobile number or email address, removing the need to share bank account details.
- Broad participation: The network includes 135 banks and numerous non-bank participants, creating a universally reachable system.
- Low-cost transactions: Customer fees are capped at a low rate of IDR 2,500, making digital payments affordable for a wider population.
Pros:
- Modern infrastructure built without legacy constraints, allowing for rapid growth and high adoption.
- Promotes financial inclusion by offering a low-cost entry point for digital payments.
- LN-friendly routing possible due to its instant, API-driven architecture.
Cons:
- Features are being rolled out in phases, with services like direct debit planned for the future.
- A transaction cap of IDR 250 million may be restrictive for some business use cases.
- Its effectiveness is limited in a country where a large portion of the population remains unbanked.
QRIS
QRIS (Quick Response Code Indonesian Standard) is a national standard that unifies all QR code payment methods in the country. Instead of merchants displaying multiple codes, a single QRIS code works with any supported mobile banking or e-wallet app. This system has become the dominant method for in-person digital payments, driving a massive shift from cash to non-cash transactions.
- Standardized QR codes: It provides a single, interoperable QR code that simplifies payment acceptance for merchants and improves the user experience.
- Widespread adoption: The standard is used by over 32 million merchants and 50 million people, creating powerful network effects.
- High growth: Transaction volume is expanding rapidly, with some financial institutions reporting usage surges as high as 270%.
- Future upgrades: The system is set to evolve with planned features like tap-to-pay functionality using NFC technology.
Pros:
- Massive adoption by both merchants and consumers has made it a de facto standard for retail payments.
- Greatly simplifies the digital payment process for all parties.
- LN-friendly routing possible, as its QR-based system could be adapted to work with Lightning invoices.
Cons:
- The system's vast size makes cybersecurity a primary concern, requiring constant monitoring to prevent attacks.
- Its focus is almost entirely on retail and merchant payments, offering less versatility than BI-FAST.
RTGS Gen 3
RTGS Gen 3 is Indonesia's upcoming next-generation Real-Time Gross Settlement system, designed for high-value and urgent interbank transfers. Built on the ISO 20022 standard, it is poised to modernize the settlement layer of the country's financial infrastructure. The system will introduce new capabilities, including support for multi-currency transactions.
- ISO 20022 foundation: It uses the global messaging standard to support richer data and greater interoperability for high-value payments.
- Multi-currency support: The system is designed to process payments in multiple currencies, which will reduce reliance on third-party networks like SWIFT.
- Automated compliance: It will feature built-in tools for automated anti-money laundering (AML) and fraud detection checks.
Pros:
- Will modernize the settlement of high-value transactions.
- Reduces friction for cross-border and multi-currency payments.
- LN-friendly routing possible, as it could act as a final settlement layer for large-value Lightning Network channel operations.
Cons:
- The system is not yet launched, so its benefits are currently prospective.
- It is intended for large-value interbank settlements, not for everyday consumer or retail payments.
Limits, Fees, and SLAs
- Limits: A per-transaction limit of IDR 250 million is enforced system-wide. Daily caps are determined by individual financial institutions, not the central system.
- Operating Hours: The system processes payments in real-time, 24/7 without any cut-offs, providing continuous availability for all transactions.
Compliance and Risk
KYC/KYB & AML
Indonesia's framework integrates AML and CFT checks directly into its payment systems like BI-FAST and the upcoming RTGS Gen 3. Regulators like OJK mandate robust consumer protection and AML measures, pushing for automated compliance and technology-driven identity verification processes.
Data Residency & Privacy
While specific data residency laws are not detailed for payment systems, regulations mandate strong consumer and personal data protection measures. The Ministry of Communication and Informatics (Kominfo) and OJK enforce data governance standards, particularly for platforms handling consumer financial data.
Fraud Controls
The payment infrastructure is designed with integrated fraud detection. Systems like BI-FAST offer automatic security features, while regulators use supervisory technology for real-time monitoring and early warning signals, shifting oversight towards a more data-driven approach to protect the ecosystem.
Recordkeeping & Audits
Regulated financial entities are required to submit periodic reports to authorities like OJK. This framework necessitates maintaining detailed transaction records and customer data to support regulatory oversight and demonstrate compliance through comprehensive, audit-ready reporting.
Lightning Network Integration as a Solution
The Lightning Network is a second-layer protocol built on Bitcoin that processes transactions off-chain through payment channels. This design permits instant, low-cost payments, making it a natural complement to local RTP rails. It can act as a global interoperability layer, connecting disparate domestic systems and filling gaps for cross-border transactions where direct integration is absent. This creates a more fluid and accessible international payment structure.
While both systems offer near-instant settlement, the Lightning Network provides a significant cost advantage, with fees often being fractions of a cent. Domestic rails like BI-FAST are confined to national borders, but the Lightning Network operates as a truly global system. It connects users worldwide, making it a powerful instrument for international commerce and remittances where local systems are unavailable or do not interoperate.
- Cross-Border Complexity: It bypasses the high fees and delays of traditional international payments by removing intermediaries and allowing for direct, near-instant value transfer across borders.
- Scalability and Cost: By moving transactions off-chain, it solves the throughput limitations of the main blockchain, making high-volume micropayments economically practical.
- Liquidity Distribution: Its routing system finds efficient payment paths across the network, allowing transactions between parties who do not have a direct channel and improving liquidity management.
Exploring its integration offers a path toward a more open and globally connected payments infrastructure.
B2B Enterprise Use Cases
- Supplier Payments – Pay international and domestic supplier invoices instantly, settling accounts in real-time without waiting for bank clearing cycles.
"Business value:" Improves supply chain liquidity and strengthens partner relationships with immediate payment. - Merchant Settlement – Convert customer sales into available funds immediately, bypassing the typical multi-day delay from payment processors.
"Business value:" Radically improves cash flow and reduces reliance on short-term operational financing. - Treasury Optimization – Move funds between global subsidiaries 24/7, responding to liquidity needs or market opportunities outside standard banking hours.
"Business value:" Provides total control over global cash positions and minimizes currency exchange friction. - Payroll – Automate salary and wage disbursements to a global workforce, including freelancers and remote employees, with instant finality.
"Business value:" Simplifies global payroll and gives employees immediate access to their earnings. - Gig Economy Payouts – On-demand platforms can pay workers for completed tasks instantly, transferring small, frequent amounts directly to their wallets.
"Business value:" Increases worker satisfaction and platform loyalty through immediate compensation.
Cross-Border Transactions and Remittances to Indonesia
Cross-border payments remain complex due to fragmented systems and regulatory hurdles. Reaching Indonesia requires rail bridging—connecting its domestic RTP rails with international networks—a process complicated by compliance costs and technical integration. Navigating foreign exchange (FX) paths adds another layer of friction, as transactions often route through intermediary currencies, increasing costs and settlement times. Initiatives like the Indonesia-Singapore QR linkage aim to simplify this, but significant bottlenecks persist for truly global, real-time settlement.
- Indonesia-Singapore: This corridor is defined by high-volume travel and economic activity, with a new QR payment linkage facilitating retail and tourism spending between the two nations. The system allows travelers to make instant payments using their native banking apps.
- Indonesia-Malaysia: As a major channel for migrant worker remittances and regional trade, this corridor relies heavily on both traditional remittance operators and increasingly, digital payment platforms. The high frequency of small-value transfers makes it a key market for low-cost payment solutions.
- Indonesia-Saudi Arabia: This corridor is primarily driven by remittances from a large population of Indonesian expatriate workers. Transactions have historically moved through money transfer services, but there is a growing shift towards mobile and app-based platforms for sending funds home.
The Lightning Network offers a direct solution by processing transactions off-chain, creating a global settlement layer. This architecture bypasses traditional banking intermediaries, drastically reducing both transaction fees and settlement times for instant, borderless payments and making international commerce more fluid.
How Lightspark Makes Integration Easy
Lightspark helps fintechs, digital banks, wallets, and exchanges connect to the Lightning Network with a complete platform. We manage the operational complexities, including automated liquidity management, optimized payment routing, and integrated compliance screening. Our enterprise-grade developer tooling and APIs are designed for building reliable payment experiences, achieving sub-second settlement globally. By abstracting the underlying network functions, we provide a direct path for you to offer instant, low-cost international payments to your customers. To learn how you can expand your payment capabilities, Talk to our team.
Sources and Further Reading
- https://www.aciworldwide.com/real-time/indonesia – Indonesia's real-time payments market overview.
- https://asianbankingandfinance.net/banking-technology/exclusive/indonesia-accelerates-real-time-payments – Indonesia's accelerated real-time payments growth.
- https://www.bi.go.id/en/iru/highlight-news/Pages/Launch-of-Cross-Border-QR-Payments-Linkage-Between-Indonesia-and-Singapore.aspx – Indonesia-Singapore cross-border QR payments launch.
- https://developers.bri.co.id/en/product/bi-fast – BI-FAST API product technical specifications.
- https://www.lightspark.com/contact – Contact the Lightspark sales team.
- https://www.lightspark.com/knowledge/is-crypto-legal-in-indonesia – Legality of cryptocurrency in Indonesia.
- https://www.lightspark.com/news/insights/what-are-lightning-payments – Explaining low-cost Lightning Network payments.
- https://www.vixio.com/insights/pc-update-indonesias-new-instant-payment-system-officially-kicks – Indonesia's new instant payment system.
