Indonesia’s Long Road to Cashless Payment
Cashless Payment – When Uber is launched in Indonesia in 2014, most of the 260 million people in the country cannot use it. Credit card ownership is not common here, and credit card payments are the only choice of application. Uber miracle depends on it: You add your credit card number once and do not have to worry about the payment again. Everything happens in the background.
In this article, we will review about Cashless payment in Indonesia. To serve more Indonesian customers, the company riding the bike had to sacrifice some of the user experience it held and had to learn to handle cash. Indonesia, like many developing countries, has no method of payment without money and is a major obstacle to the growth of the digital economy. For the digital economy to reach the expected target of US $ 130 billion by 2020, a breakthrough in cashless payments is required.
Now, government agencies, banks, telco, and fintech beginners are scrambling to lead the shift from cash. There are two main scenarios: one involves the formal banking sector that gathers a much wider net, dramatically increasing the number of bank accounts, debits, and credit cards used. In the US, for example, credit cards are a ubiquitous form of cashless payments. According to Statista, there are more than one billion credit cards circulating there. That’s for a population of around 320 million people. The Central Bank of Indonesia (BI) counts about 17 million credit cards in a country of about 260 million people.
It looks a little better when it comes to debit cards – 143 million are being circulated according to BI. Most of these cards cannot be used for online shopping, and there are only about one million card readers (EDC) all over Indonesia, which means that debit card holders often cannot use them whenever they want. Another scenario looks to China, where third-party payment providers like Alipay and Tencent Pay seem to have replaced cash overnight. This is possible because of the smartphone boom. Credits stored in mobile wallets can be transferred instantaneously and at low cost. In China, the mobile payment ecosystem has branched out to the extent that you use your WeChat app to pay if you’re at a traditional restaurant or market. That’s the article about cashless payment.