The State of Financial Services Innovation in Indonesia: Payment Platforms



Technological disruption in the Indonesian financial services sector has been ‘turbo-charged’ by the COVID-19 pandemic. In the face of travel restrictions and lockdown regulations, Indonesia has experienced an accelerated surge in digital adoption among consumers - particularly for electronic payments and online shopping. On the supply side, this has stimulated a growth spurt for both e-commerce and digital payments platform providers.


With this opportunity, the industry has seen an increasing influx of e-wallet companies over the past five years. Consequently, the digital payments landscape in Indonesia has become fiercer and more fragmented with nearly 50 licensed e-payment platforms now in operation - led by domestic operators from both public and private sectors.


According to Bank Indonesia (BI), the gross value of electronic money transactions reached IDR 201 trillion (USD 13.95 billion) in 2020, growing by 38.62% from IDR 145 trillion (USD 10.07 billion) in 2019.


Furthermore, BI expects that the uptake of digital transactions will continue with the e-commerce and e-payments categories each growing by around 33% year-on-year (YoY) by end-2021.


The increase in digital payments transactions is further evidence of the rapidly-evolving financial literacy of the Indonesian population. It also demonstrates the increasing acceptance of fintech and e-commerce services across a broad spectrum of consumer and enterprise segments.


In this Wellington Perspective we explore these rapidly-evolving market dynamics, and provide a ‘deep-dive’ profile of seven of the prominent e-money providers - both domestic and regional.


We also examine the ‘Buy Now Pay Later’ (BNPL) phenomenon, an increasingly popular mechanism for allowing consumers to defer payment for goods bought online (e.g. equipment for working and learning from home) for up to nine months. This facility also offers an alternative to credit cards, faster access to loans, flexibility in instalment payments and low interest rates.


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Indonesia Payment App
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