Business Environment

E-Payment by Electronic Money in Indonesia



Electronic money has grown with the development of car dispatch apps

The first full-fledged smartphone dispatch app to be available in Indonesia was Uber, which expanded from the US in August 2014, followed by motorbike taxi GrabRide in November 2014, but it's still fresh in our minds that the home-grown GoJek app was launched in 2015 and quickly increased its visibility and market share with that shocking "10,000 rupiah for a ride anywhere" campaign.

In the case of Ojek, a motorcycle taxi on the side of the road, it's a hassle to negotiate a fare with the driver, and in the case of bluebird taxis, the fare is high and the evening, it was hard to catch them in the rush to get home, so you can rest assured that Gojek.

You can order a registered driver from the smartphone app, and you don't have to worry about making change, plus it's cheap GoJek, which can be ridden on the GoJek, has become a revolutionary service for users to get around.

Drivers are motivated by the fact that they can earn bonus points based on their distance, at one point, it was even said that it was more profitable to be a GoJek driver than to work in an office.

But it is an initial strategy to receive huge funding and dominate the market as quickly as possible, the process of penetrating the market while improving the quality of the service as planned was the very history of a very good start-up company growing into a decacorn company.

Fares and bonuses for GO-JEK drivers in Indonesia

GoJek has since turned profitable in the third quarter of 2019, turning from a single-minded strategy of expansion that continues to add more types of services to a "select and focus" strategy that strengthens its core business: transportation, food delivery and e-money.

These car-dispatch services in Indonesia are supported by electronic payment services such as GoPay and OVO.

With the development of smartphone app services and online marketplaces, the value of e-payment transactions in Indonesia has continued to increase over the past three years, reaching a growth rate of 241.2% in the fourth quarter of 2019.

The Benefits of Ecommerce Payments for Consumers and Businesses

The three largest transactions in Indonesia with the largest amount of e-money usage are as a means of payment in retail stores (28%), online transportation bookings for transportation (27%) and meal delivery bookings (20%), other ones are using it for e-commerce payments (15%) and bill payments (7%) in online marketplaces such as Tokopedia and Shopee, which are the two dominant marketplaces.

The pioneer of electronic money in Japan was a pre-charged card issued by East Japan Railway Company (JR East) that you can use by charging your card in advance I think it's a prepaid Suica.

Similar to this are e-money and BCA Flazz, which are partnerships between Bank Mandiri and Indomaret in Indonesia, and in October 2017, TOL (highways) went completely cashless with these contactless IC cards.

Indonesia's Tol (toll highway) going cashless

And the equivalent of PayPay used for QR code payment at convenience stores in Japan is GoPay and OVO, etc. in Indonesia, the top-up balance is limited to about Rp.1juta.

There is no doubt that the biggest reason for the rapid penetration of smartphone payments among people of all ages is the discount and cash-back campaigns such as "50% discount for using ShopeePay.

In the current corona pandemic, the trend to refrain as much as possible from using paper money and coins, which can also be a medium of infection for the virus, is driving the usage rate of e-commerce payments on smartphones.

The benefits of smartphone payments for street vendors and micro-enterprises include: streamlining operations by reducing payment time, eliminating the need for change, bookkeeping by automatically recording transaction history, and eliminating the need to go to the bank to save sales.

GoPay frequently conducts on-site briefings for small and medium-sized self-employed businesses and is trying to increase the number of micro-business partners throughout Indonesia.