Business Environment

The state of fintech in Indonesia【The use of cryptocurrency as a means of payment is prohibited】



The GO-JEK app has become an integral part of the lives of Indonesians

We usually have our Sunday night meal delivered by GO-FOOD and eat it in an air-conditioned room while watching TV.

It's a total of Rp.77,000 for two Bakso, but when you call GO-RIDE or GO-CAR, or when you top up your phone's pulsa with GO-PULSA, before you know it, you'll have accumulated VOUCHER for Rp.50,000 and this time you'll be paying with GO-PAY for Rp.50,000 VOUCHER It is only Rp.33,000.



In my wife's words, paying with GO-PAY is Beruntung ulang2 (a great deal again and again), so if you top up your phone's PULSA from Net Banking or ATMs, for example, that's it, but if you use GO-PULSA through your BCA Virtual Account When you top up, you accumulate a VOUCHER and you can pay the GO-RIDE next time you go out for free, and it's already at the level where it's ridiculous to pay in cash.

I take the elevator down to the lobby of my apartment to pick up my Bakso from the GO-FOOD guy, and the LCD ad in my apartment is all over the Tokopedia group, and the payment for Toraveloka, the ticket booking service for airfare, is the same as GO-PULSA. Through BCA Virtual Account, you pay after topping up to Tokopedia's payment service, TokoCash.

Just from an ordinary Sunday night episode, you can see that smartphone payment services are deeply ingrained in our daily lives in Jakarta.

The word FinTech is a combination of finance and technology, meaning financial IT or financial technology. Unlike credit card payment, which requires a terminal to read the card, the payment can be made through 4G radio waves.

Bridge Note, provided by a Japanese accounting consulting company in Jakarta, is a value-added service that combines "finance + technology" with "accounting consultation".

Will Ripple (virtual currency XRP) start a financial revolution?

One of the biggest potential innovations in fintech is virtual currency, but as of 2017, the Indonesian government has banned direct payments with bitcoin and altcoins, limiting it to transactions as a financial instrument only.

Recently, there was talk that the Chinese government may ban virtual currency exchanges themselves following the ban on ICOs (Initial Coin Offering New Virtual Currency Offerings), which has caused a huge uproar in social networking circles such as Facebook and Twitter, but in terms of fintech, the The most impactful is one of the altcoins, Ripple (virtual currency XRP).

For example, I regularly transfer money from BCA Bank to my account at SMBC Trust Bank in Japan, and the flow of money is as follows.

  • Bank BCA Indonesia => Sumitomo Mitsui Banking Corporation => SMBC Sumitomo Trust & Banking

In the case of remittances to banks in Indonesia, the funds are transferred between banks to a checking account opened in Bank Indonesia (BI), but in the case of foreign exchange remittances to Japanese banks, the BI's functions are carried out by a correspondent bank (correspondent bank) This is fulfilled by the Sumitomo Mitsui Banking Corporation (SMBC).

Specifically, SMBC will act as a correspondent bank for remittances from BCA Bank to the SMBC Sumitomo Trust and Banking in Japan, and settlements will be made between the rupiah and yen nostro account at SMBC. and XRP will be used in place of the nostro account.

Two things can happen as a result of this

  1. What currently takes about two days to be deposited into the SMBC Sumitomo Trust and Banking account from BCA takes only a few minutes.
  2. Currently, it costs 3,000 yen to transfer money, but it will be cheaper.

While the benefits to consumers are gratifying, it could also lead to a veritable financial revolution for banks, making the money transfer business unviable.