TikTok Explores Talks With Government To Get Payment Licenses In Indonesia

TikTok explores travel permits in Indonesia. (photo: dock. pexels)

JAKARTA - TikTok informed Reuters that they are in the early stages of talks with regulators to obtain a payment license in Indonesia. This move will further strengthen their e-commerce ambitions in today's primary market, especially as they are under intense scrutiny in the United States and other countries.

This news follows an announcement by TikTok CEO Shou Zi Chew last June that this short video platform will invest billions of dollars in Indonesia and other Southeast Asia.

Two sources with knowledge of the plan say that TikTok, which is owned by Chinese technology company ByteDance, is in discussions with Indonesia's central bank and its app is being viewed with a positive view.

A TikTok spokesperson confirmed on Friday 4 August that the talks were ongoing, adding that payment licenses in Indonesia would help creators and local sellers on their platforms.

The sources refused to be identified because the negotiations were confidential. A representative from the central bank, Bank Indonesia, did not respond to requests for comment.

By having a payment license, TikTok can take advantage of transaction fees and more directly compete with e-commerce giants in Southeast Asia, such as Alibaba's Sea's Shopee and Lazada.

TikTok has 125 million users in Indonesia every month - a number comparable to the user figure in Europe and not too far from the United States, where they have 150 million users.

Douyin, a Chinese version of TikTok which is also owned by ByteDance, obtained a payment license in China in 2020. It is unclear whether TikTok has obtained a payment license elsewhere in the world. ByteDance and TikTok did not immediately respond to a request for comment on licenses.

Indonesia, with a population of more than 270 million, contributed nearly 52 billion US dollars (Rp788 trillion) in e-commerce transactions last year, according to data from consultant Momentum Works. Of these, 5% occurred on TikTok, especially through live broadcasts.

TikTok plans to launch an e-commerce platform to sell Chinese-made goods in the United States this month. They have informed Reuters that they are not planning to launch this service in Indonesia, where senior officials have expressed concerns that the country could be hit by imports of Chinese-made goods.

TikTok has faced growing concerns in the United States about the possible influence of the Chinese government over this platform. The White House and many state governments in the United States have banned the use of TikTok on government devices, and the state of Montana plans to ban it completely from next year.

The company has stated that it is not sharing, and will not share user data in the US with the Chinese government, and has taken major steps to protect the privacy and security of TikTok users. Australia and Canada have also banned the use of TikTok on government devices.