Business Environment

Electronic payment methods as an open platform



E-payment situation in Indonesia

As of May 2020, there are 13 types of electronic money licensed by Bank Indonesia (Bank Indonesia) in the form of chip-based contactless IC cards, such as Mandiri e-money and BCA Flazz, and 47 types of server-based smartphone apps, such as GoPay and OVO.

As of May 2020, there are 13 contactless IC cards (chip-based), such as e-Toll cards and BCA Flash, and 47 smartphone apps (server-based), such as GoPay and OVO, that have been licensed by Bank Indonesia for electronic money. It's interesting to note that there are a lot of them I've never heard of.…

Indonesia's Tol (toll highway) going cashless

While the Japanese smartphone app type PayPay, seems to be able to be recharged at major banks' mobile apps and 7-Eleven as well as automatic account withdrawals, GoPay can be topped up with mobile apps and Alfamart in convenience stores.

Even though it can't do automatic account withdrawals, and the contactless IC card type Like Suica, e-money and Flazz can be topped up at convenience stores and smartphone carrier agencies, and are widely used in Indonesia, where many people don't have a bank account.

The most frequently used smartphone app-based e-money in Indonesia in 2019 was GoPay (launched in 2016), which is integrated into the payment of various GoJeK services, followed by OVO (2019), which can be used for payment of food delivery GrabBike, also (launched in 2006), followed by DANA (launched in March 2018), which was developed as a payment vehicle for Bukalapak, and Telkom's LinkAja (launched in March 2019).

Fares and bonuses for GO-JEK drivers in Indonesia

I use five of these four major payment apps plus ShoppePay (launched in June 2019), and despite the fact that they normally charge Rp.1,000 in administrative fees (Biaya Admin) when topping up from BCA mobile (OVO will cost Rp.1.500 from August 25), Dana and ShopeePay are still free.

Partly for the purpose of increasing the number of users and eroding the market share occupied by GoPay and OVO, but partly because of GoJek's business strategy of shutting down GoLife at the end of this month and concentrating on its core business of transportation, food delivery and e-money.

Considering the change in direction, the business model of Bukalapak and Shopee, whose core business is an online marketplace, is probably highly profitable in the first place.

Gojek lays off 430 employees as GoLife business closes

Payment methods as an open platform

While e-money like PayPay in Japan has been popularized as an "open platform" payment method that replaces cash and credit card payments with electronic payments, smartphone-based e-money in Indonesia has a special history of growing as an "application platform" payment method, such as GoFood, GrabFood and Shopee.

Currently, OVO and Dana are trying to expand their market share by increasing the number of merchants as a means of payment in an open environment that can be used outside of applications.

Core business for smartphone-based electronic payment services in Indonesia

  • GoPay⇒Electronic Payment, Bike Taxi and Food Delivery at GoFood merchants
  • OVO⇒Electronic payments at GrabFood merchants, Bike Taxi, Food delivery, Electronic payment outside the merchant
  • Dana⇒Electronic payment outside the merchant
  • ShopeePay⇒Electronic payment and online marketplace (Shopee) , Electronic payment outside the merchant
  • LinkAja⇒Telkom (smartphone), PLN (electricity) and Indihome (high speed communication line provider).

Given Indonesia's unique situation, where bank account ownership is still only 49% but smartphone penetration is said to be over 60%, there is room for electronic payment services as a non-application, which is open platform that can be used for shopping for consumer goods and food in everyday life to continue to expand the market to consumers who do not have a bank account and are not able to make debit or credit card payments.