TEMPO.CO, Jakarta - BANK Indonesia`s (BI) regulation on e-money top up, released two weeks ago, gives the impression that the central bank would rather put the burden of cost on consumers instead of on the banks issuing the e-money cards.

The newly issued National Payment Gateway regulation runs counter to the national non-cash drive which the central bank itself has been vigorously promoting in the past three years. BI has been promoting the efficient, practical and secure aspects of non-cash transactions. This system is also hoped to boost money circulation.

Through the previous program, BI pushed for the automation of transactions in transportation, parking and even social assistance programs. Payment methods such as Go-Pay adopted by Go-Jek, an online transport company, is considered as one of the non-cash payment instruments highly compatible with the digital ideology. Go-Jek, which made it into the Fortune magazine's Change the World list, does not charge any top-up fees to its customers.

Hence, BI's inconsistency is apparent as it allows e-money top-up fees while promoting digitalization of financial transactions. Although the top-up fee appears insignificant at Rp1,500, Bank Indonesia has given legal grounds to e-money card issuing banks to impose levies on the public.

One of the banks revealed its plan to issue 1.5 million e-money cards in addition to the 6.5 million cards already in circulation. There are at least six banks which are dominant players in the e-money card business. Added with cards issued by retail companies, the number of transactions will surely soar. Jasa Marga's market segment alone sees around 3.4 million daily transactions in toll road payment. Coupled with transactions in the private sector, the total number of daily digital transactions is estimated to be around five million.

The banks argued that the levy is necessary to help them shoulder the service and infrastructure maintenance costs. Bank Central Asia stated that it needed Rp80 billion annually to produce the cards, provide tools and maintain digital transaction networks. Bank Mandiri, meanwhile, declared that levies collected would be invested in electronic data capture machines and cards. The question is why must they burden the consumers to pay for all these investments, instead of using the interest generated from the transactions? After all, consumers already bear the cost when they buy the cards.

The policy is also in conflict with the government's intention to cut down on the costs of logistics instead of adding extra charges. In the past, toll road users could pay toll fares in cash without additional fees required by e-cards. Therefore, it is inappropriate if modern technology which should be facilitating efficiency on all fronts will, in fact, burden consumers.

It is not possible to put breaks on the digitalization of the banking sector. There will come a time when conventional banks will become less relevant. In the UK alone, many banks have switched to digital services, reducing the number of physical banks to 15 percent. If banks are not swift enough in responding to these changing trends, they will eventually be abandoned by consumers. And if they impose disincentives such as top-up fees, e-card issuing banks will have a hard time maintaining customer loyalty.

Read the full story in this week’s edition of Tempo English Magazine