4-8-2023 (JAKARTA) TikTok is currently in discussions with regulators in Indonesia to obtain a payments licence, as part of its efforts to expand its e-commerce capabilities in the Southeast Asian market. The move comes at a time when the popular social media platform is facing increasing scrutiny in the United States and other countries.
TikTok CEO, Shou Zi Chew, announced in June that the company plans to invest billions of dollars in Indonesia and the rest of Southeast Asia. The platform has 125 million monthly active users in Indonesia, which is on a par with its user base in Europe and not far behind its user base in the US.
According to sources familiar with the matter, TikTok is in talks with Indonesia’s central bank and the application is being viewed favourably. If successful, the payments licence would allow TikTok to benefit from transaction fees and put it in direct competition with established e-commerce giants in the region, such as Sea’s Shopee and Alibaba’s Lazada.
A spokesperson for TikTok confirmed the ongoing discussions, stating that an Indonesian payments licence would help local creators and sellers on its platform. The sources declined to be identified as the negotiations were confidential. Bank Indonesia, the central bank, did not respond to requests for comment.
Indonesia, with a population of over 270 million, recorded nearly US$52 billion worth of e-commerce transactions last year, with 5% of those transactions taking place on TikTok, mainly through live-streaming.
Douyin, the Chinese version of TikTok owned by ByteDance, received a Chinese payments licence in 2020. It is unclear if TikTok has obtained a payments licence elsewhere in the world. ByteDance and TikTok did not respond to requests for comment on the matter.
TikTok plans to launch an e-commerce platform to sell Chinese-made goods in the US later this month. However, the company has stated it has no plans to launch the service in Indonesia, where officials have expressed concern about flooding the market with Chinese-made imports.
TikTok has been under increasing scrutiny in the US due to concerns over possible Chinese government influence. The White House and many US state governments have banned the use of the platform on government devices, and the state of Montana plans to ban it altogether from next year. However, the company has consistently maintained that it has not shared, and would not share, US user data with the Chinese government, and has taken measures to protect the privacy and security of its users.
Australia and Canada have also banned the use of TikTok on government devices.
