Understanding Payment Systems and Payment Instruments


Understanding Payment Systems and Payment Instruments

Rancakmedia.com – To understand the meaning of payment systems and payment instruments, you can easily read the discussion this time, because we will provide the information in detail.

Some individuals may not understand the importance of payment systems. Even though this payment system is developing quite rapidly in Indonesia,

As transactions progress, new payment system models have emerged to make it easier for parties to carry out certain types of transactions.

Mostly, individuals are abandoning the use of traditional payment methods. because consumers choose to utilize digital payments as one of the available payment options.

The way people paid for goods in the past was through a barter system. Means of payment or goods are traded based on what the barter player wants.

A general payment system with monetary value has emerged, however, with money payments. Demand deposit money can be in the form of a check, demand deposit, or a number of other payment instruments.

Many people's lives have changed because of this new understanding of payment systems. Of course, with the presence of a payment system, you must understand the definition of a payment system to make it easier for you to understand the payment system that is currently developing in Indonesia.

The following is the definition of payment system

What is that payment system? Several institutions, regulations, and methods regulate payment systems, which are used to streamline the movement of money within the system to fulfill ongoing commitments within a business.

This payment system is used to transfer payments from one party to another party. As a result of the interdependence between these payment systems and other payment processes such as services, products, and bill payments and receivables management,

Technological complexity has of course penetrated the corporate sector, especially internet companies. This can be seen from the payment system used.

With the evolution of today's payment systems, both consumers and business owners no longer need to worry about spending or receiving money in cash. because the non-cash payment system can now be accepted by both customers and company owners.

Due to the payment system's emphasis on reducing the use of cash, many people now choose to store their money in electronic wallets.

With the simplicity of the cashless payment system, it helps people transition to using it. Because, apart from being practical and simple, transaction security is guaranteed and reduces prohibited activities.

Bank Indonesia is the entity tasked with overseeing the development and implementation of the country's payment system. Bank Indonesia's role is as a financial intermediary, operator, regulator and payment system user.

The two types of payment systems are cash payment systems and non-cash payment systems. Additionally, banks can be used to separate your personal and company funds, and their security measures are excellent.

Commercial banks or commercial banks are the entities responsible for the proper running of this payment system.

The Role of Bank Indonesia in the Payment System

As said before, the involvement of banks in the creation of a public payment system is very important. In the payment system, banks play the following roles:


As a development regulator, Bank Indonesia's main responsibility in the payment system is as a regulator. Bank Indonesia, as the country's central bank, prioritizes ensuring that the payment system continues to run smoothly at all times.

As a Supervisory Institution

Bank Indonesia supervises the payment process or the actions of people who use the payment system to ensure everything runs well and smoothly.


Every company that participates in implementing the payment system obtains permission from Bank Indonesia. This permit is for institutions that will carry out fund transfer activities, payment tools using cards (APMK), and electronic money.


Bank Indonesia plays a role in helping business actors in the service industry finance building a payment system. This is to increase the security and efficiency of how the payment system works.

Payment System Components

Below is an explanation of the many components of the payment system.


It is the institution's responsibility to ensure full settlement of all transactions that occur while the payment system is in use.


Here, infrastructure refers to the physical infrastructure used to support the systems that complete payment transactions.


The instrument itself is the next item on the checklist. In this instrument, the form of payment is made either in cash or non-cash, which is agreed upon by the user when carrying out a transaction.


And this final component is the user. Users are part of the payment system who use the payment system as end users.

Understand the meaning, types and components of payment systems. Then you can make good use of the various payment systems that already exist.

Understanding Payment Instruments and Their Types

Almost everyone is familiar with payment instruments, namely tools used to carry out payment activities in different ways. These payment instruments are divided into cash and non-monetary payment instruments.

The development of payment mechanisms is currently also developing significantly. If in the past the payment system was still in the form of barter, now payments can be made in cash, even using electronic currency.

It's important that the payment method has the same transaction value as the item purchased, so it should be easy for everyone to understand how to use.

For additional specifications, we present a comprehensive evaluation of payment tools for you.

Cash Payment Tools

Cash payments are the most basic form of payment. Historically, people have paid each other with cash. By using this application, you can carry out various transactions related to buying and selling.

Additionally, payments made in cash are referred to as “cash payments”. This makes money the oldest and earliest form of payment known to man. The Rupiah was developed by Bank Indonesia and is the official currency of Indonesia.

Money issued by anyone other than Bank Indonesia will be considered counterfeit, and this is something we should avoid.

Some countries have made cashless a way of doing business to stop people making counterfeit money. The Indonesian government also supports this, because making your own currency is usually more expensive than making non-cash money.

Non-Cash Payment Tools

Paying using non-cash instruments such as demand deposits, checks, electronic money, etc., not cash, is what we mean by non-cash payment instruments. In Indonesia itself, the power to create demand deposits rests with all banks, except Bank Indonesia.

The following are several types of non-cash transaction instruments that you can use.


Checks were the first form of non-cash payment. You can use a check as proof that the bank will transfer money from one person to another person whose name is printed on the paper on which the check is written.

Line of Business

Almost the same as a check, but the difference is that a giro is not used to withdraw money in the name written on paper, but to transfer money from another customer's account to the customer's account listed on paper.

Debt Debt

This payment is made by first making a debt to the bank, then spending it. You should record every time you spend money on a piece of paper. The bank will then process the documents, and you will be able to make repayments on the loan.

Credit card

Credit cards are a non-cash payment tool that is currently very popular because almost everyone uses a card so that their payment activities can run smoothly.

The method is almost the same as using a debit card; the only difference is that the use of this card is almost identical to an ATM, but simpler.

Electronic Money

In today's world, you can make various payments using various types of electronic money. The procedure is also very easy. You simply deposit a certain amount of money to a third party so that it can be converted into electronic money.


Below are questions and answers that you might need answers to

What are the Basic Principles of Payment Systems?

In carrying out this task, BI refers to four payment system policy principles, namely security, efficiency, equal access and consumer protection.

Safe means that all risks in the payment system, such as liquidity risk, credit risk and fraud risk, must be managed and mitigated properly by each payment system operator.

The idea of ​​efficiency emphasizes how important it is to use the payment system as optimally as possible so that the costs incurred by society will decrease as the economic scale develops.

Then there is the concept of equality of access, which shows that BI does not want monopolistic ways of functioning the system that could prevent other participants from joining. Lastly, the role of all payment system administrators is to pay attention to consumer protection elements.

Meanwhile, in relation to being an institution that circulates money, the smoothness of the payment system is demonstrated by maintaining the amount of cash circulating in the community and in a condition that is acceptable for circulation, usually called a "clean money policy".

What is a Non-Cash Payment System?

What is meant by "non-cash payment" is a transaction system or technique without using currency in real form.

A cashless payment system is a payment system without using cash. This system was adopted in retail transactions during the 1990s. It is not a replacement for a monetary payment system, but rather a supplement to it.

What is meant by Payment Instrument?

The definition of a means of payment is a tool used to pay for the acquisition of goods and services that has been obtained. The means of payment are generally money, both cash and non-cash.


The payment system is developing quite rapidly in Indonesia. Consumers and business people no longer need to worry about spending or receiving money in cash. Due to the emphasis on reducing the use of cash, many people now choose to store their money in e-wallets.

Bank Indonesia's role is as a financial intermediary, operator, regulator and payment system user. As a development regulator, Bank Indonesia's main responsibility in the payment system is as a regulator. That is the information we can convey, hopefully this article is useful.

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Hi, let me introduce myself, Lutfi Hulasoh, I am a writer and techno blogger. I started creating a personal blog writing informative articles about the latest trends and developments in technology. My writing covers a wide range of topics, from mobile applications to artificial intelligence, and I can also provide easy-to-understand explanations to help readers understand complex concepts.