The current era of digitalization greatly affects economic development in the business sector, including financial transaction activities that can be facilitated through Payment Service Providers (Penyedia Jasa Pembayaran or "PJP"). PJP plays an important role in facilitating efficient and secure payment innovations. However, with technological advancements, there are challenges in conducting business activities as a PJP, such as maintaining the security and privacy of service users and complying with PJP licensing regulations outlined in Bank Indonesia Regulation No. 23/6/PBI/2021 concerning Payment Service Providers ("PBI 23/2021"). These challenges are not only experienced by PJPs; many companies that have obtained PJP licenses from Bank Indonesia ("BI") also face problems related to capital management, financial conditions, industrial developments, and competition, all of which impact business sustainability. Consequently, BI, as the supervisory institution for PJPs, has the obligation to supervise and evaluate the operations of PJPs that have obtained PJP licenses.

PJP License Evaluation

As part of its supervision, BI will conduct an evaluation every 3 (three) years for PJP licenses that have been issued. This evaluation will consider various aspects, including transaction performance, business or institutional activities, efficiency or concentration levels in the payment system industry, and compliance with laws and regulations. BI will base its evaluation on the results of its supervision, corporate actions taken by PJPs, applications for license extensions (if applicable), recommendations from other authorities, court decisions with permanent legal force, PJP applications to cease activities, and other relevant factors aimed at creating a fast, easy, cheap, safe, and reliable payment system.

Revocation of PJP License by BI

Based on this evaluation, BI may decide to shorten or extend the validity period of the PJP license (if it was granted for a specific duration), revoke the PJP license, or allow the PJP's business continuity. If BI decides to revoke the PJP license, certain steps need to be taken. Firstly, the PJP company must notify all parties with whom it cooperates that their licenses have been revoked. Secondly, a PJP company whose license has been revoked must terminate cooperation with other PJPs from the date of receiving the notification of license revocation while ensuring consumer protection. Finally, after terminating the cooperation, PJP companies must send a written letter to BI no later than 10 (ten) working days from the date of terminating the cooperation.

Application for Termination of Activities or Voluntary Revocation of License

If a PJP decides to request the termination of activities or the revocation of its license voluntarily, it must submit a written request to BI at least 30 (thirty) working days before the planned termination date. The request should include necessary information and documents, such as the reasons for terminating activities, the effective date of termination, the mechanism for notifying or informing related parties about the planned termination, mechanisms for settling rights and obligations, and any other information requested by BI. Subsequently, within 10 (ten) working days from the date of the termination letter from BI, the PJP must report the implementation in writing to BI. BI will then publish information about the revocation of the PJP license on its website or other media.

The PJP company must ensure that it fulfills the aforementioned obligations. Failure to comply may result in administrative sanctions, such as reprimands, temporary suspension of activities (partially or entirely), including the implementation of cooperation, or revocation of the PJP license.

Settlement of Obligations

In the event of PJP license revocation, the PJP must first fulfill all Payment System settlement obligations to service users and cooperating parties. Only after completing these obligations can the PJP submit a follow-up plan for payment system settlement to BI. This plan should include a mechanism for the settlement period of all obligations. If the PJP needs an extension for the payment system settlement, it can submit a written letter to BI, accompanied by reasons and proposed extension period, no later than 30 (thirty) working days before the expiration of the settlement period determined by BI.

During the payment system settlement extension period, the status of PJP license revocation should be considered. BI may revoke the license while ensuring the follow-up settlement of obligations by transferring the PJP's obligations to the Public Trustee Agency (Balai Harta Peninggalan or "BHP"). All impacts arising from the PJP's obligations with service users and cooperating parties will remain the responsibility of the PJP once BI revokes the license. In the case of transferring obligations from PJP to BHP, PJP may charge transfer fees, which will be transferred to BHP.

It is important to note that the evaluation of a PJP license also applies to licenses that have been revoked based on the PJP's application. This includes situations where a PJP cancels its license revocation application during the obligation settlement process or license revocation process. The cancellation request should be submitted in writing to BI and should include the reasons for the cancellation, improvement efforts made to the Payment System activities, and the PJP's commitment to carry out Payment System activities again in accordance with BI regulations. Based on the license revocation or evaluation request, BI will issue approval or rejection of the PJP license revocation.

The information provided in this article is not intended as legal advice. All information, content, and materials contained herein are for general knowledge purposes only.