Joint Corporation Between BC Card and Bank Mandiri Set to Break Apart

Mar 15, 2019

A joint corporation that was established by BC Card and Bank Mandiri, which is the largest government-run bank in Indonesia, is set to break up. BC Card sold all of its 49% shares of the joint corporation to Bank Mandiri. As a result, first card payment processing business between South Korea and Indonesia is on brink of being split apart and there will be setbacks to establishing ICT (Information Communication Technology) infrastructures in Indonesia.
‘Card payment processing business’ between BC Card and Bank Mandiri is in a crisis due to regulations by Indonesian Government. This business is a large-scale IT business based on transferring entire payment system to Indonesia. BC Card was planning to export its card payment infrastructures and work on establishing ICT (Information Communication Technology) infrastructures for medium and long-term. BC Card was the first South Korean financial company to participate in a bid to become Bank Mandiri’s partner and it was selected as the preferred negotiator after competing with 10 other global businesses from the U.S., Japan, and Germany.
However, Indonesian Government prevented BC Card from participating by stating that Indonesian financial payment infrastructures need to be operated by Indonesian businesses. It was confirmed that it notified Bank Mandiri to exclude foreign businesses from participating. As a result, BC Card is going to give up its shares of the joint corporation to Bank Mandiri and only manage business maintenance of the joint corporation. “Indonesian Government requested limitation on foreign capitals regarding payment business of a government-run business.” said a representative for the joint corporation. “However, this business will continue and BC Card will continue to participate in this project as a service provider.

BC Card is on the verge of having its project for establishing ICT infrastructures in Indonesia fall apart due to Indonesian Government’s greed.  BC Card’s headquarters in Seocho-gu.  Staff Reporter Park, Jiho | jihopress@etnews.com <BC Card is on the verge of having its project for establishing ICT infrastructures in Indonesia fall apart due to Indonesian Government’s greed. BC Card’s headquarters in Seocho-gu. Staff Reporter Park, Jiho | jihopress@etnews.com>

Industries predict that BC Card’s IT infrastructures in Indonesia will be handed over to an Indonesian business as the joint corporation has basically become a subsidiary of Bank Mandiri. It is expected that BC Card’s influence will take a hit as the joint corporation is set to go through a breakup. BC Card is planning to make an announcement regarding liquidation of its shares sometime during this month and report to financial authorities.
BC Card has been making a lot of contributions to exporting ICT to Indonesia. It has been pushing for entire credit card IT processing business for five years and it was planning to expand its business to various financial and payment businesses with Indonesian telecommunication businesses.
It seems that financial authorities have yet to have enough information regarding this issue. Some say that South Korean Government must step up in this issue as Indonesian Government made restriction on foreign capitals official because this issue can create negative effects to other financial IT-related exports. Indonesia along with Vietnam are countries that are emerging as new markets. It is also seen as a land of opportunities as it lacks financial and IT infrastructures. From 2013 to 2020, CAGRs (Compound Annual Growth Rate) of Indonesia’s debit card and credit card are 21% and 17% respectively.
Staff Reporter Gil, Jaeshik | osolgil@etnews.com

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