Payment System General Information

1.	Q: Why does each country need a payment system?
	A: If a country didn’t have a payment system, funds transfers would not move. Even if they did, settlement would pose numerous obstacles and complications. Why is this? If the existing system were not used, what mechanism for settlement of funds transfers would be used? Without a system, the flow of funds would undoubtedly grind to a standstill, bringing down the nation's economy.
2.	Q: What then is the payment system?
	A: The payment system is a set of components that collectively represent an integral whole necessary to enable transfer of monetary value from one party to another party. These parties may be individuals, companies or banks. The components normally found in a payment system are payment instruments, operating institutions, infrastructure, agreements among stakeholders, rules, operating mechanisms and the legal framework.
3.	Q: Could you explain what is meant by payment instrument?
	A: There are several different types of payment instruments in common use, consisting of cash (such as banknotes and coins) and non-cash instruments (cheques, giros and drafts, debit cards, e-money and so on). These payment instruments are vital to the operation of a payment system.
4.	Q: What are cheques?
	A: A cheque is an instrument for payment of cash that requires availability of funds on demand, particularly when presented or cashed by the bearer. The period for presentation (encashment) of cheques is 70 days after date of issue. If this period expires, the cheque becomes void, meaning that it cannot be cashed. A cheque is a special kind of draft and must be issued by a bank. It differs from the kind of draft commonly known to the public, comprising the money order for transfer of funds through the post office. This does not need to be issued by a bank.
5.	Q: When BI issues or prints new currency, why are there sometimes apparent similarities in the designs or colours with other currency? For example, the Rp 100,000 note issued in 2004 appears similar to the Rp 10,000 note issued in 2005.
	A: At a glance, the two banknotes do appear similar, particularly in regard to colour. However, when examined more carefully for both design and colour, there are obvious differences. BI always informs the public of each issue of new currency, including any apparent similarities in colour or design between two different banknotes or coins.
6.	Q: Each time BI issues currency, security features are always included. How many security features can be found in each issue?
	A: The number of security features for each denomination is not always the same. The larger the denomination, the more security features are used. As a rule, the same types of security features are used for all rupiah denominations, but the designs are different.
7.	Q: Where can the security features normally be found, and what features are incorporated in rupiah currency?
	A: General information on security features for rupiah currency can be found under the titles of currency material, printing and minting techniques, design and dimensions.
8.	Q: What is meant by damaged currency? What are the criteria for damaged currency to be redeemed at BI?
	A: Damaged currency is currency that has sustained physical damage. If more than half (≥ 50%) of a damaged banknote remains intact, it can be redeemed at face value if it still bears at least 1 (one) serial number. However, if less than half (<>
9.	Q: What should be done if a member of the public comes into possession of banknotes that are worn, torn or no longer valid as legal tender?
	A: If a member of the public has received banknotes that are worn, torn or no longer valid as legal tender, these banknotes may be redeemed at Bank Indonesia. (*)