TikTok is Reportedly in the Middle of Submitting a Digital Payment Platform License to Bank Indonesia

TikTok is reportedly negotiating to obtain a payment platform license in Indonesia. First submitted by Reuters, the source said TikTok had spoken with Bank Indonesia for this matter.

It is known, one of the conditions for obtaining a digital payment license from BI is that a (foreign) company must be a legal entity in Indonesia. This is stated in Bank Indonesia Regulation Number 22/23/PBI/2020 concerning Payment Systems. For this reason, TikTok must also create a PT in Indonesia to carry out its operations.

If you manage to get the license, later the creator and seller can make transactions directly without having to use a third-party payment service. This certainly benefits TikTok, being able to benefit from transaction fees charged (previously managed by parties payment gateway).

This step is a follow-up on the agenda after TikTok CEO Shou Chew paid a visit to Indonesia in June 2023 and stated his readiness to invest $10 billion in Indonesia and Southeast Asia.

The existence of an integrated payment system can also provide further support to the platform E-commerce owned by TikTok. As is known, almost all E-commerce Currently, popular ones have their own payment services (Shopee with ShopeePay, Tokopedia with Gopay, Bukalapak with Funds, and so on).

TikTok Shop is increasingly popular in Indonesia. According to a survey conducted Telkomsel not long ago, the platform became top of mind buying and selling services on social platforms that are loved by the people of Indonesia. As many as 76,75% said they got cheaper prices, another 65% said there were lots of promos at the TikTok Shop, and 52% were models live-shopping offered more intuitively.

However, it cannot be denied that TikTok's fantastic actions have also received an unpleasant response in a number of countries. The governments of Australia and Canada have even banned the use of TikTok on government devices. Likewise in the United States government.

The issue of Project S has also recently become a hot topic of discussion. TikTok's plan to sell products that are self-produced/supplied from China to the TikTok Shop market in Indonesia has received a lot of criticism, considered to be able to kill MSMEs here. The reason is armed with the data they have, allows companies to get insight valuable insights into consumer preferences and the products to be sold.

The government, through the Ministry of Trade, moved quickly, by starting to update the regulations regarding E-commerce. From the proposed beleid plan points, social commerce receive special attention -- including related to taxation. Another point that was also conveyed was the ban on platform developers from selling self-produced goods (white label).