This article has been updated to correctly reflect the development of E-Money in Indonesia, 2019
The development of e-money in Indonesia shows a positive sentiment. This is evidenced by the many financial institutions began to release e-money products. Not only banks but also companies like telco, financial services, retail and more industries. A variety of e-money was issued, either in the form of mobile applications (Sakuku, CIMB Niaga Go-Mobile, Mandiri E-Cash, Link Aja, Gopay, Bukadompet, Tokocash, OVO, iSaku, Dana, etc.) or electronic card (BCA Flazz, BRI Brizzi, BNI TapCash).
There are strong reasons that underlie the development of e-money in this country. This could be a consideration for businesses of various industries to move forward and develop the cashless movement in Indonesia.
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Government Supports
The government has shown its support through the finalization of regulations in electronic money. There are also some policies issued to ensure the usage of e-money is socialized. One of them is by providing public transportations which can be accessed through e-money payment. At the time of this article is first written in September 2016, the central Bank of Indonesia is discussing the regulations that facilitate the licensing of e-money for financial institutions. Currently, strengthened for better consumer protection in 20/6/PBI/2018.
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Users Will Face (Almost) No-Hassle In The Registration Process
One of the advantages of using e-money is no hassle for the users’ registration. To have e-money, users do not need to sign up to the e-money provider’s office or open a bank account. Anyone can register for an e-money account. Users can also instantly top up their e-money through a variety of top-up services for example, through the driver of ride-hailing services, e-money mall stand, ATMs, mobile banking, or convenience stores nearby. It is very easy for users, particularly for those who live in rural areas that are still difficult or unreachable by banking solutions.
This practical method could be a trigger to attract users to sign up in the e-money financial services. It is also cost-effective for a financial business to set up branchless e-money services while gaining more customers.
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Mobility Access
Your e-money is basically going wherever you go. As mobile phones are carried around all day, so does e-money that sticks in the gadget. Once users download the e-money app, or by having the e-money on mobile number (just like some telco providers offers, in Indonesia, we have XL Tunai by XL, T-Cash by Telkomsel, or Dompetku by Indosat), users may pay or purchase anything with their mobile phone. Mobile technology has enabled people to use their daily gadgets as a wallet. And it opens up the opportunity for the financial service industry to escalate in digital technology.
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Merchant Promotions
Who doesn’t like discount promotions? There are many merchants and e-commerce services in cooperation with e-money providers to make a joint promotion. By giving out discounts or other benefits in using e-money, it is expected to gain more users and more consumers for the business. Restaurants, cinemas, bookstore, even public services are good to go with your e-money.
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Middle-Class Purchasing Power
The highest purchasing power in Indonesia is coming from the middle class. They are young, working hard, and not afraid to spend their earnings on stuffs that they need or want. This goes well with lifestyle in big cities and trends spreading in other areas. 74 million people in Indonesia are classified as ‘middle class and affluent’ consumers, with that number set to rise to 141 million by 2030. The utilization of e-money is very much in favor of this class, considering the purchasing power.
Setting up an e-money business is not an easy thing to do, but also never too complicated to be done. Financial institutions which already have the frameworks and strategy can team up with software development company to build a solid e-money system. WGS is experienced in building this system for some of the prominent regional bank, startup, & retail business in Indonesia. Contact us for further support to build & enhance your e-money system.