QRIS Payments in Indonesia: How It Works, Challenges, and the Future

2025-02-24

QRIS was launched by Bank Indonesia (BI) in 2019 to unify digital payments, enabling seamless interoperability between banks and e-wallets. By August 2024, it reached 52.55 million users and 33.77 million merchants, with 217.33% annual transaction growth. QRIS supports ON-US and OFF-US transactions, involving multiple intermediaries. Major players include GoPay, Dana, OVO, LinkAja, BCA, BNI, and BRI. Cross-border QRIS now operates in Thailand, Malaysia, Singapore, and more. QRIS Tap and QRIS Tuntas enhance payment efficiency, while BI is improving refund mechanisms and expanding global integrations.

qris

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indonesia

Indonesia's QR code payment system, QRIS (Quick Response Code Indonesian Standard), has significantly transformed the country's digital payment landscape since its introduction by Bank Indonesia (BI) in 2019. It allows seamless interoperability between banks and e-wallets, promoting financial inclusion and the adoption of cashless transactions.

The adoption of QRIS has seen remarkable growth. As of August 2024, the number of QRIS users reached 52.55 million, with 33.77 million merchants utilizing the system. This represents a 217.33% increase in transactions on an annual basis. Perbanas Institute

The Evolution of QR Payments in Indonesia

Before QRIS, Indonesia's digital payment landscape was fragmented, with each bank and e-wallet provider utilizing its own proprietary QR code. This fragmentation led to several challenges - Lack of interoperability, multiple QR codes at merchants, Slow adoption rates, Regulatory inconsistencies

To address these issues, Bank Indonesia, under the leadership of Governor Perry Warjiyo, officially launched the Quick Response Code Indonesian Standard (QRIS) on August 17, 2019, coinciding with Indonesia's 74th Independence Day. Bank Indonesia set a compliance deadline in 2019, requiring all payment service providers to adopt QRIS by January 1, 2020. BI

May 27, 2019: Bank Indonesia introduced the QRIS code system, aiming to universalize cashless payments in the country. The Jakarta Post
August 17, 2019: Official launch of QRIS.
January 1, 2020: Mandatory adoption of QRIS by all payment service providers. Tech in Asia

QRIS Basics

A QRIS transaction involves multiple participants:

Merchant: The business that displays a QRIS code for payment.
Consumer: The customer who scans the QR code to pay.
Issuer (PJSP): The bank or e-wallet that provides the QR payment service to the consumer.
Acquirer: The bank or e-wallet that provides QRIS services to the merchant.
Switching Network: Connects the issuer and acquirer, enabling interoperability.
Settlement Bank: Handles the final settlement of funds between parties.

Types of QRIS transactions

Similar to cards, a QRIS transaction can be of multiple types

ON-US - when both the issuer and acquirer is the same provider
OFF-US - when the issuer and acquirer are different

How do Off Us transactions work?

When you as a customer scan a QR, the request goes through a number of hops to reach the merchant. The basic idea is that each issuer and acquirer connect to their own switches.

So an OFF-US transaction from a customer on the GoPay app to a merchant on BCA would go as follows

Customer to GoPay
GoPay to GoPay's switch
GoPay's switch to BCA's switch
BCA's switch to BCA
BCA to it's merchant.

In addition, there are at least 6 daily recons that would need to run to detect any issues

Between GoPay's internal systems
Between GoPay and GoPay's switch
Between GoPay's switch and BCA's switch
Between BCA's switch and BCA
Between BCA's internal systems
Between BCA and it's merchant

Usually, any network calls inside a provider's own infra have high reliability. However, each hop outside their network increases the chances of failures. In addition, each recon increases the time taken for refunds to reach the consumer.

Major Issuers and Acquirers

As of the latest data, the largest issuers facilitating QRIS transactions include:

GoPay: A leading digital wallet service integrated with the GoTo ecosystem.
Dana: A well known digital wallet.
OVO: A prominent e-wallet offering versatile payment solutions across various merchants.
LinkAja: An e-wallet service backed by major state-owned enterprises.
Bank Central Asia (BCA): One of Indonesia's largest private banks with extensive digital payment services.
Bank Negara Indonesia (BNI): A state-owned bank actively promoting digital transactions.
Bank Rakyat Indonesia (BRI): Known for its vast network and support for micro, small, and medium enterprises.
There are over 100 banks and 50 ewallets in Indonesia, and most of them support QRIS now.

Major Switching Networks

QRIS transactions rely on several switching providers, responsible for processing transactions between issuers and acquirers. Each switch is owned by a different financial entity:

Artajasa – Private (Bank-driven)
Rintis – Private (Bank-driven)
Jalin – Owned by Himbara (State-Owned Banks)
Alto – Private (Fintech-friendly)

These switching networks ensure fast, secure, and interoperable transactions across different financial institutions.

QRIS Pricing & Revenue Distribution

Bank Indonesia regulates QRIS transaction fees through the Merchant Discount Rate (MDR), a fee applied per transaction that is shared among different stakeholders in the ecosystem.

MDR Fees by Merchant Type

Regular Merchants: 0.7% – The fee is distributed among issuers, acquirers, and switch providers.
Micro Merchants (UMI): 0% for transactions up to Rp500,000 – Small businesses are exempt from fees to encourage adoption. MDR QRIS For Merchants
Education, Government, and Social Donations: 0% – No charges apply for public benefit institutions.

Revenue Distribution for Regular Merchant Transactions

The distribution of this fee among the involved parties is as follows:

Issuer (Bank/E-wallet providing payment service): Receives approximately 40% of the MDR.
Acquirer (Bank/E-wallet serving the merchant): Receives around 50% of the MDR.
Switching Provider: Allocated about 10% of the MDR.

This low MDR structure promotes widespread merchant adoption of QRIS, while ensuring the system remains financially viable for service providers.

QRIS Cross-Border Payments

Indonesia has been actively expanding cross-border QRIS payments, enabling users to make seamless transactions in partner countries using QRIS-compatible systems.

QRIS cross border transactions in Indonesia are via the G2G (Government to Government) corridor only, which means that the heavy lifting is done by the switches and they connect to switches in external countries. In addition, the FX conversion is done by the switches at a spread mandated by the Bank of Indonesia.

Current and Upcoming Cross-Border QRIS Partnerships

Thailand (PromptPay): The collaboration between Bank Indonesia (BI) and the Bank of Thailand (BOT) began with a pilot phase on August 17, 2021, and was officially launched on August 29, 2022. This allows consumers and merchants in both countries to make and accept instant cross-border QR payments for goods and services. InsightPlus
Malaysia (DuitNow): BI and Bank Negara Malaysia (BNM) initiated a pilot phase in January 2022, targeting a full commercial launch in the third quarter of 2022. This partnership enables users to perform instant, secure, and efficient transactions between the two countries. InsightPlus
Singapore (NETS): BI and the Monetary Authority of Singapore (MAS) started work on a cross-border QR payment linkage in August 2022, with the objective of launching in the second half of 2023. This initiative aims to allow users to make instant, secure payments by scanning the Quick Response Code Indonesian Standard (QRIS) or NETS QR codes displayed by merchants in both countries. InsightPlus
Japan (JPQR): On December 9, 2022, BI signed a memorandum of understanding with Japan's Ministry of Economy, Trade, and Industry to enable cross-border QR payments between the two countries. The implementation is expected to start by 2025, allowing Indonesian users to scan JPQR codes in Japan and vice versa. Tech in Asia
China: In September 2021, BI and the People's Bank of China agreed to promote the use of local currencies and explore cross-border payment systems, including QR code-based transactions. This collaboration aims to reduce transaction costs and provide alternative payment options for trade and tourism between the two countries. Amro Asia
South Korea: BI has announced plans to establish cross-border QR payment linkages with South Korea, aiming to facilitate seamless transactions for tourists and businesses. While specific launch dates are yet to be confirmed, agreements are expected to be signed in the near future. Antara News
India: Discussions are underway between BI and the Reserve Bank of India to implement cross-border QR payment systems, enhancing economic integration and providing efficient payment solutions for travelers and merchants. Details regarding the launch timeline will be announced as the collaboration progresses. Antara News
United Arab Emirates (UAE): BI is also working towards establishing cross-border QR payment cooperation with the UAE, aiming to boost economic ties and facilitate transactions for businesses and tourists. Further information on the implementation timeline will be provided as agreements are formalized. Antara News

These cross-border QRIS partnerships are designed to reduce foreign exchange fees and enhance convenience for travelers and merchants, thereby promoting economic integration and financial inclusion within the region.

QRIS Tuntas

Tuntas is an initiative by Bank Indonesia (BI) aimed at enhancing the country's digital payment ecosystem by introducing real-time, and inclusive payment solutions. Officially launched on August 17, 2023, Tuntas expands the capabilities of the existing QRIS (Quick Response Code Indonesian Standard) by enabling seamless interbank and e-wallet transactions, including cash withdrawals, transfers, and deposits. BI Publication

Key Features of Tuntas

Cash Withdrawals (Tarik Tunai): Users can withdraw cash by scanning QRIS codes at ATMs or participating merchants, eliminating the need for physical ATM cards with a fee of Rp6,500.00 Badan Pusat Statistik
Fund Transfers (Transfer): Facilitates instant money transfers between users by scanning QRIS codes, promoting interoperability between different banks and e-wallets with a fee of Rp2,000.00 or Rp2,500.00 depending on the type of transaction.
Cash Deposits (Setor Tunai): Allows users to deposit cash into their accounts through QRIS-enabled ATMs or agents, streamlining the deposit process, with a fee of Rp5,000.00.

QRIS Tap: Enhancing Payment Efficiency with NFC Technology

Bank Indonesia (BI) is set to introduce QRIS Tap, an innovative feature leveraging Near Field Communication (NFC) technology.

QRIS Tap enables users to complete payments by simply tapping their NFC-enabled devices on compatible payment terminals, eliminating the need to scan QR codes. This feature is particularly advantageous in high-traffic environments such as public transportation and retail sectors, where speed and convenience are paramount.

One-Step and Two-Step Transaction Processes

The implementation of QRIS Tap encompasses two distinct transaction processes:

One-Step Process: In this streamlined approach, the payment is processed immediately upon tapping the device on the terminal, facilitating rapid transactions ideal for settings like mass transit systems.
Two-Step Process: This method involves an initial tap to initiate the transaction, followed by a confirmation step on the user's device. This added layer of verification is suited for retail purchases where users may need to review transaction details before finalizing the payment.

Projected Launch

BI plans to roll out QRIS Tap in the first quarter of 2025. For a visual overview of QRIS Tap and insights into its upcoming implementation, you can watch the following video:

Transaksi QRIS Tap NFC Meluncur di 2025, Bank Siap Jalankan!

QRIS Concerns: Improving the refund process

QRIS refunds remain a pain point for consumers and merchants due to several key issues that create frustration and inefficiencies in the payment ecosystem:

Lack of Instant Refunds – Failed transactions, whether due to system errors, network issues, or incorrect processing, can take several days to weeks to be resolved. Consumers often have to wait extended periods to get their money back, creating distrust in the system.
No Real-Time Dispute Resolution – In cases of double-charged transactions or incorrect deductions, there is no immediate mechanism for consumers to initiate a dispute and receive an instant refund. Instead, users must submit claims through their banks or e-wallets, leading to manual verifications that significantly slow down the process.
Cross-Provider Complexities – Since QRIS transactions involve multiple parties (issuers, acquirers, switching networks, and settlement banks), refunds require coordination among different systems. A failed transaction may get stuck between providers, causing delays and confusion over which entity is responsible for resolving the issue.
Lack of Standardized Consumer Protection Measures – Each financial institution has its own refund policy and timeline, leading to inconsistent user experiences. Some banks or e-wallets process refunds quickly, while others take much longer, depending on their internal protocols.
Merchant Challenges – Merchants also face difficulties when handling refund requests. If a transaction is incomplete or duplicated, merchants often have to manually verify payments and issue refunds separately, which can be time-consuming and lead to customer dissatisfaction.

Efforts to Improve QRIS Refunds

Bank Indonesia (BI) and QRIS providers are actively developing automated refund mechanisms to make QRIS refunds faster and more efficient. Some of the proposed solutions include:

Real-Time Refund Processing – Implementing an automated system where failed transactions are detected and reversed within minutes instead of days.
Unified Dispute Resolution Framework – Establishing a centralized dispute resolution process that standardizes refund timelines across all QRIS providers.
Enhanced System Monitoring – Strengthening monitoring tools to quickly identify failed or duplicate transactions and trigger immediate refunds without requiring manual intervention.
Improved Cross-Provider Coordination – Enforcing standardized refund policies for issuers, acquirers, and switching networks to ensure a seamless refund experience for users.

These improvements aim to make QRIS a more reliable and consumer-friendly payment system, reducing friction for both consumers and merchants.