Indonesia’s National Islamic Finance Committee (KNKS) expects to soft launch a Shariah compliant digital payment system next month as part of its multipronged five-year Islamic economy master plan to become a preferred global hub of the Halal industry.
Developed by government-affiliated Fintek Karya Nusantara in collaboration with state-owned Islamic banks, LinkAja Syariah will be released to a selected audience next month, KNKS Director Afdhal Aliasar, who oversees the Shariah economy and Halal industry portfolio, revealed at IFN Indonesia Forum 2019 in Jakarta, which welcomed 300 delegates.
The Shariah version of LinkAja has been in development over the last four months, Afdhal told IFN Fintech. Instead of having conventional banks as part of the payment settlement process, the platform will instead utilize local Islamic banks as settlement banks while merchants will be carefully curated to ensure end-to-end Shariah compliance, explained Afdhal.
LinkAja, which was officially launched in late May, aims to be the largest digital payment platform in the 264-million strong Republic. Despite being an overwhelmingly Muslim nation — the largest in the world — Shariah compliant economic activities account for less than 9% of Indonesia’s US$1 trillion economy, the largest among its ASEAN peers.
To enhance the country’s Shariah economic contributions, KNKS introduced the Master Plan for the Indonesian Islamic Economy (MEKSI) in May, identifying Islamic finance and the digital economy as cornerstone of the national strategy. LinkAja Syariah is one of at least three Islamic fintech initiatives in the works which also include digitalizing Zakat payments and establishing a centralized digital platform for Islamic cooperatives.
It is learned that the upcoming Shariah digital payment platform will be integrated with e-commerce platforms which KNKS is in discussions with, to have these platforms carve out a specific segment for Halal products, including Islamic financial investment instruments, according to Afdhal.