Bank Indonesia (BI) is advancing the adoption of a digital transaction identification system known as Payment ID to improve transparency in payment processing.

According to a report by Bloombergtecnoz, this initiative is part of Indonesia’s Payment Systems Blueprint 2025 and also highlighted again in the 2030 roadmap.

Payment ID functions similarly to the globally recognized Transaction ID, as explained by Stripe, a global payment infrastructure provider, where it serves as a unique alphanumeric code attached to every transaction to ensure traceability, confirmation, and auditability.

In the Indonesia Payment Systems Blueprint 2025, Bank Indonesia emphasizes Digital ID and Payment ID as fundamental pillars to broaden access to digital financial services.

Payment ID is designed as a unique identifier connecting payment transaction data securely with user identities, making verification easy and reliable.

How Payment ID Works: Integration and Data Security

Payment ID allows granular data processing through BI’s Data Hub, which integrates transaction data from various financial sources, including bank accounts, credit cards, electronic wallets, and online loans (pinjol), all linked with the National Identification Number (NIK).

This integration creates a comprehensive profile of an individual’s financial activities.

Bank Indonesia’s Director of Payment System Policy Department, Dudi Dermawan, explained in an Editors Briefing, "Payment ID ini sangat powerful" ("This Payment ID is very powerful").

He added that Payment ID data is stored centrally by BI. Access to this data by third parties like banks or financing institutions requires user consent, which is obtained via notifications sent to the user’s phone.

Only after approval can transaction data be used for financial services such as credit assessments or government aid distribution.

The system has been developed with attention to security and privacy, in compliance with the Personal Data Protection Law, alongside strict supervision of data access by financial institutions.

The Role of Payment ID in Financial Inclusion and Government Aid

Payment ID is expected to support financial inclusion and facilitate government aid distribution by allowing secure digital verification of users through the KYC (Know Your Customer) process.

Reported by CNN Indonesia, this means government assistance can be delivered more accurately to verified recipients.

According to BI, Payment ID also provides more accurate financial health assessments by analyzing both income and spending patterns.

Dudi Dermawan noted, "Kami (BI) akan melindungi pemilik Payment ID dan menghindari penyalahgunaan dari pihak-pihak yang tidak diinginkan" ("We (BI) will protect Payment ID owners and prevent misuse by unwanted parties").

Risks and Security Measures of Payment ID

Despite being built on user consent and personal data protection laws, Payment ID still carries potential security risks.

Based on information from Stripe, these risks include:

• Transaction Tracking: Criminals could misuse Payment IDs to monitor user payment histories across platforms, potentially exposing spending habits and threatening user privacy.
• Phishing Attacks: Scammers might attempt to acquire Payment IDs via phishing emails or fake websites, using this information to deceive users or conduct unauthorized transactions.
• Data Breaches: If a system storing Payment IDs is hacked, large-scale data leaks could occur, damaging both companies and customers.

Bank Indonesia assures that it will build infrastructure to protect Payment ID owners and prevent misuse by unauthorized parties.

User consent remains a mandatory prerequisite for data sharing.

Current Status and Future Prospects of Payment ID Implementation

According to Bloombergtecnoz, the Payment ID system is currently in the phase of regulatory expansion and strengthening.

Bank Indonesia announced plans to officially launch Payment ID on Indonesia’s Independence Day, August 17, 2025.

The system aims to establish a transparent and accountable payment ecosystem, strengthening transaction integrity and supporting policy-making with detailed, accurate financial data.

By positioning Payment ID as a public data asset, BI hopes to improve transparency and accountability within Indonesia’s payment systems and financial infrastructure.

PHOTO: BANK SINARMAS

This article was created with AI assistance.