Celios Economist Reminds Implementation Of Payment ID Must Be Accompanied By Data Protection And Risk Mitigation

JAKARTA - In order to welcome the 80th Anniversary of the Republic of Indonesia, Bank Indonesia (BI) plans to hold a trial of the latest innovation called Payment ID.

Payment ID is a payment system that is integrated with each other in one identity and functions to trace financial transactions based on data from the owner of the Identity Card (KTP).

In addition, this system relies on unique codes along nine characters in the form of a combination of letters and numbers, which are used as identities in each financial transaction.

With this system, all financial transaction activities of a person, either through bank accounts, digital wallets, or other payment applications, will be connected and recorded automatically, and will store the owner's transaction history thoroughly.

Director of the Digital Center of Economic and Law Studies (Celios) Nailul Huda also highlighted the importance of data protection in the implementation of the Payment ID system by Bank Indonesia.

He emphasized that Indonesia already has a Personal Data Protection Act, so Bank Indonesia must comply with the regulation.

"Our financial data is not used for other purposes other than the use by banks with the approval of Bank Indonesia," he told VOI, Wednesday, August 6.

Furthermore, Huda explained, the main strength of Payment ID lies in its ability to track a person's flow of funds and find out the purpose of its use.

According to him, this allows the system to identify potential creditors involved in illegal activities such as online gambling.

"So the system is similar to SLIK, but this reads the flow of money from customers," he said.

However, Huda reminded, the implementation of Payment ID must be accompanied by caution in identifying suspicious transactions properly and correctly.

"With Payment ID, our transaction can be tracked as a transaction related to crime. Now, the indicator for this crime sector transaction can be a debate over what indicators," he added.

Huda menambahkan, jangan sampai rekening masyarakat dibekukan hanya karena dicurigai terlibat judi online, padahal tidak demikian.

Sebagai langkah antisipatif, ia menilai, skema mitigasi risiko seperti mekanisme pemblokiran rekening harus dipersiapkan.

Selain itu, Huda menyampaikan infrastruktur terkait dengan sistem deteksi dini terhadap kejahatan keuangan juga perlu diperkuat, termasuk peningkatan penerapan sistem Know Your Customer (KYC) oleh perbankan, agar Payment ID dapat berjalan secara optimal.

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Huda added that people's accounts should not be frozen just because they are suspected of being involved in online gambling, even though they are not.

As an anticipatory measure, he assessed, risk mitigation schemes such as account blocking mechanisms must be prepared.

In addition, Huda conveyed that infrastructure related to the early detection of financial crimes also needs to be strengthened, including improving the implementation of the Know Your Customer (KYC) system by banks, so that Payment ID can run optimally.