Things are changing rapidly in Indonesia as the overall cost for money transfers remains too high. The central bank’s new retail payments system is designed to help resolve this problem. Real-time transactions at lower fees will benefit millions of people.
Cheaper Money Transfers In Indonesia
Numerous countries rely on the impact made by money transfers to keep their economies afloat. Indonesia is one country where remittances are incredibly crucial, yet they also suffer from high fees. More specifically, the previous system for money transfers had an average cost of 6,500 rupiahs, or $0.46. That may not seem like much to Westerners, but it represents a lot of money for the people who can barely make ends meet.
Moreover, overall money transfers in Indonesia have risen by 47% every year. It confirms the demand for remittance solutions in the country despite the high fees. However, the country’s central bank acknowledges something needs to change and has developed a new retail payments system.
The BI-Fast solution introduces real-time remittance solutions of up to 250 million rupiahs or over $17,600. However, the maximum fee will be capped at 2,500 rupiahs or $0.18. A vast improvement over the previous system, confirming remittance options shouldn’t be overly expensive in the first place.
Indonesia is a country where demand for digital payments continues to surge. Part of that momentum is that influenced by the global pandemic. That trend will likely carry over to 2022, as COVID-19 remains an ever-present problem globally. Moreover, digital payments provide numerous benefits to all users.