Payment ID Can Prevent Corruption In Procurement And Distribution Of Social Assistance

Bank Indonesia (Photo: Doc. VOI)

JAKARTA - Bank Indonesia (BI) plans to test the latest innovation called Payment ID, an integrated payment system that combines all financial transactions in one identity, and functions to trace transactions based on data from the owner of the Identity Card (KTP).

Director of Economic Digital Center of Economic and Law Studies (CELIOS) Nailul Huda assessed that Payment ID has great potential in monitoring the distribution of social assistance (bansos).

According to him, with this system, the use of social assistance funds can be thoroughly monitored, starting from government treasury to transactions by beneficiaries.

"If we also relate it to the supervision of the use of social assistance, which I think can be monitored more easily when using Payment ID. Social assistance funds will be recorded starting from government cash to use by social assistance recipients," he told VOI, Wednesday, August 6.

Huda said that if all transactions are carried out digitally, the chances of corruption and misuse of funds can be significantly reduced, and fraud crimes can also be detected early when trying to commit financial crimes.

"However, this step must also be accompanied by an increase in the prosecution of financial criminals," he said.

He added that the use of similar technologies had previously been proposed through blockchain for social assistance distribution.

"In the past, we once said that blockchain utilization technology was used to provide social assistance. So this social assistance transaction can be recorded properly, used for what is appropriate or not," he said.

Huda conveyed that the use of Payment ID can also be used to monitor transactions related to the purchase of goods by the government, which have been prone to corruption and bribery practices (kickback).

"It can even be used for the purchase of goods by the government which is prone to corruption, kickback, and so on. So the finances related to government transactions can take advantage of payment ID," he added.