A Peek at the Differences between Indonesian Credit Cards with Visa, Mastercard, and JCB

Payment systems continue to evolve in line with user needs and technological advances. In the context of credit card services, one innovation that answers user needs is the Indonesian Credit Card (KKI). This product is the result of innovation from Bank Indonesia (BI) as a development of the Domestic Government Credit Card (KKP Dalam Negeri). KKI is specifically designed to support non-cash transactions in the procurement of government goods and services.

However, what exactly distinguishes KKI from other credit cards such as Visa, Mastercard, and JCB? Let's take a closer look.

History of Indonesian Credit Card Development

Before the existence of KKI, the central and regional governments used Domestic KKP for non-cash purchases of goods and services. The Domestic KKP transaction system uses international payment networks such as Visa and Mastercard. Reliance on these networks led to higher transaction costs due to the additional costs of using international networks. In addition, there are also concerns about risks related to the security of data processed overseas. This issue was one of the reasons why Bank Indonesia later launched the National Payment Gateway (NPG).

GPN is an interbank network system that integrates various payment instruments and channels nationwide. After having a domestic payment network, Bank Indonesia then issued KKI as a development of the Domestic KKP. The launch of the KKI with the NPG payment system, among others, aims to support domestic programs and reduce dependence on international payment networks.

The launch of the KKI was carried out by the Governor of Bank Indonesia together with the Coordinating Minister for Economic Affairs of the Republic of Indonesia during the Indonesian Digital Financial Economy Festival (FEKDI) 2023. The event was held in Jakarta and led online by President Joko Widodo.

KKI aims to accelerate and simplify the procurement process of goods and services within the central and regional governments. In addition, the existence of KKI is also an effort by Bank Indonesia to improve efficiency and transparency in the management of government spending.

Differences between KKI, VISA, Mastercard, and JCB

There are various types of credit cards that users can choose from. Understanding the differences between KKI and other credit cards is important so that you can choose a payment product that suits your needs. The following is a comparison between KKI, Visa, Mastercard, and JCB:

Indonesian Credit Card (KKI)

KKI is specifically designed for non-cash transactions in the procurement of goods and services by the central and local governments. KKI can only be used by government officials and employees for domestic transactions. The KKI security system uses security protocols from GPN to safeguard data processed domestically. GPN equips the KKI with a chip and a 6-digit PIN. During the transaction process, end-to-end encryption is also applied to prevent fraud.

The use of the GPN network also ensures lower KKI transaction costs compared to cards that rely on international networks. KKI services using the GPN network are indeed part of Bank Indonesia's grand strategy to create a more independent and competitive domestic payment ecosystem.

Visa

Visa is a type of credit card issued by an American company, Visa Inc. Visa cards can be used all over the world, although they are limited to merchants that support the Visa network. To ensure transaction security, Visa uses a One Time Password (OTP) system to authenticate online transactions. The OTP will be sent to the cardholder's mobile phone every time a transaction is made, so only the authorized cardholder can complete the payment.

Mastercard

Mastercard is issued by MasterCard Worldwide, a company also based in the United States. Similar to Visa, Mastercard can also be used to make international transactions, although it is more popularly used in America and Europe. To maintain security, Mastercard uses an OTP-like authentication system known as Mastercard SecureCode to protect online transactions.

Japan Credit Bureau or JCB is a Japanese credit card payment network. JCB has a fairly wide network, especially in the Asian region, but is not as popular as Visa or Mastercard in the international market. This makes JCB cards more commonly used in regions that have strong JCB infrastructure support, such as Japan and several other Asian countries. JCB cards can be used at merchants, EDC machines, and for online transactions that support the JCB network. Outside of Asia, JCB has partnerships with other networks such as Discover in the United States, which allows JCB cards to be accepted at certain locations outside of their core network.

Just like Visa and Mastercard, JCB also implements security technologies such as OTP (One-Time Password) for online transactions, ensuring that only authorized cardholders can complete payments. JCB is also equipped with an EMV chip to minimize the risk of skimming and fraud in physical transactions.

Benefits of Indonesian Credit Card (KKI)

As one of Bank Indonesia's strategic initiatives, KKI is present to support more modern, transparent, and efficient government financial management. With various advantages offered, KKI is an important instrument in supporting non-cash government transactions. Here are some of the main benefits of KKI:

Accelerate and improve the transparency of government budget management
Reducing the risk of counterfeit money circulation by minimizing cash transactions
Improving the efficiency of budget utilization through accurate recording mechanisms
Encouraging regional economic growth by prioritizing domestic payment systems
Reduce the cost of using supply money (UP) and speed up the transaction process
Reducing the amount of unproductive cash (idle cash) in the government financial system.

KKI is also designed with specific features and characteristics that distinguish it from other types of credit cards. Some of these characteristics ensure that its use is in line with the needs of central and local governments:

All transactions using KKI are clearly recorded and integrated with the state financial management system.
No interest is charged, so it does not burden the government budget.
The card limit is adjusted to the budget allocation that has been determined for each Regional Apparatus Organization (OPD).
Use of the GPN network that ensures transactions are only processed domestically.

The main objective of the KKI issuance by BI is to facilitate and accelerate payment transactions by the government, while ensuring transparency and efficiency in budget management. KKI is also a tangible manifestation of support for the Proud to Make Indonesia Movement (GBBI) and the implementation of INPRES No. 2 of 2022 to accelerate the increase and use of domestic products.

Three Phases of KKI Launch

The launch of the Indonesian Credit Card (KKI) by Bank Indonesia was carried out through three main phases to ensure measurable adoption and in accordance with the needs of the national payment ecosystem. The following are details of the three phases:

First Phase: QRIS-based transactions

The first launch took place on August 28, 2022. In this phase, KKI was introduced as a QRIS (Quick Response Code Indonesian Standard) based cashless transaction tool. The loan transaction limit provided in this phase is Rp10 million, which is focused on the basic needs of government financial management.

Second Phase: Physical card launch

The second phase began on May 9, 2023, with the introduction of the KKI physical card. This card is equipped with chip and PIN-based security features, and has a loan transaction limit of up to Rp200 million. The launch of this physical card is intended to expand user accessibility in offline and online transactions.

Phase Three: Online payment feature with tokenization

On August 2, 2024, Bank Indonesia launched the third phase, which is online payments supported by tokenization features. This technology is designed to improve the security and convenience of digital transactions. Just like the second phase, the transaction limit for this phase is IDR 200 million.

With the completion of all three phases, KKI is now a more flexible and innovative payment tool. KKI not only supports QRIS-based transactions and physical cards, but also facilitates online payments with a higher level of security.

These three phases of the KKI launch are part of the Indonesia Payment System Blueprint (BSPI) 2025-2030 strategic initiative, which aims to support digital economic and financial integration and strengthen the independence of the domestic payment system.

Conditions for Ownership and Use of Indonesian Credit Cards (KKI)

Like the Domestic KKP, one of the requirements for Indonesian Credit Card (KKI) holders is that they must be officials and employees who work in central and regional government work units. Thus, the use of KKI, only in limited circles and the purpose is for official transactions or official government interests and not for personal use. Examples of its use include the procurement of office inventory, building renovations, or financing official travel for development activities.

KKI can be used by vertical work units of Ministries/Institutions and Regional Work Units (SKPD). In addition to Civil Servants (PNS) who serve in administrative positions, members of the TNI and POLRI who are on duty are also entitled to have KKI.

To apply for the issuance of KKI, the applicant must prepare the following documents:

Reference letter from the Stakeholder Work Unit
KKI Registration Form from a bank that cooperates as an issuer
Copy of Identity Card (KTP)
Copy of NPWP card
Copy of the Approval Letter for the Amount of Supply Money issued by the State Treasury Service Office (KPPN)
Copy of Letter of Appointment of Budget User Authority (KPA)

These documents are submitted to the Kuasa Pengguna Anggaran (KPA) which is then forwarded to the KKI issuing partner bank.

After submitting these documents, the KKI issuing partner bank will verify the KKI Issuance Application Letter. After the application passes verification, your KKI will be issued. However, to be able to use KKI, credit card holders must first carry out an activation process by contacting the KKI administrator or call center provided by each issuing bank. In this process, you will be asked for an activation PIN by the issuing bank. Once the process is complete, you can make transactions with KKI.

Overall, BI launched KKI as a tool to facilitate budget management in the context of implementing government tasks. Are you one of those eligible to use KKI? If yes, KKI can be an efficient solution for work operational transactions, procurement of goods, or financing official travel. Remember, its use must still be in accordance with regulations, especially for official government purposes.