Indonesia’s Race in Mobile Wallet Platforms
- Written by TechXO Team
- Category: Fintech
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In the past few years, a lot of mobile wallet platforms have launched in Indonesia.
According to RedSeer mobile wallets are a rapidly rising FinTech field in Indonesia. The market reached $1.5 billion in 2018, and the pool is estimated to reach $25 billion by 2023. Mobile banking is becoming a comfort for Indonesians that use financial services, and it proves that digital channels are important for financial institutions.
As of today, 37 companies hold e-money licenses from Bank Indonesia. Bank Indonesia is the country’s financial authority and has noted that there were more than 274 million transactions, in 2019 alone, of a combined value of IDR 5.82 trillion (USD 412 million) that utilized electronic money.
Leading the mobile wallet competitions are Go-Jek’s Go-Pay and Lippo-backed Ovo. These two platforms are one of the most generous in cashback promotions and discounts compared to their competitors.
Dondi Hartanta sees that FinTech will continue to evolve in Indonesia as only less than half of Indonesia’s population already has access to banking services. “For payment, I think we can see two big players dominating this category, Go-Pay, and Ovo. The two platforms are very strong and it will be difficult for new players to beat them, even for the big state-owned platform like LinkAja,” Hartanta told KrAsia.
Is Ovo Leading the E-wallet Race?
Ovo partnered with big lending platforms Teralite and Do-It and collaborated with Bareska, which is backed by Lippo two weeks ago. Ovo has made very strategic moves to extend their services beyond payments, giving solutions for fast and reliable financing in Indonesia.
Ovo said that the collaboration wants to increase the purchasing power of Indonesians and provide business of any size with better opportunities to have a source capital for their businesses.
Morgan Stanley suggests that Ovo has more users than rival Go-Pay. The firm conducted a survey and found out that 86% of the respondents knew Go-Pay and Ovo; however, 73% of respondents use Ovo, two percentage points over Go-Pay. Possibly the nuance can be explained by Ovo’s entry into lending and investment business that differs from Go-Pay.
Ovo is playing the race well is staying ahead among its competitors. It has become the largest mobile payment and FinTech platform in Indonesia. Ovo’s CEO Jason Thompson claimed that over 110 million people in 300 Indonesian cities—98% of the Indonesian adults—are Ovo users during Money20/20 held this month in Singapore.
Go-Pay is Everyone’s Partner
Alpha JWC Ventures VP of Investment Melina Subastian asserts that Ovo’s diversity of services does not give it the superiority. “The upper hand of a platform does not depend on the diversity of services or products but also factors such as the number of customers, number and value of transactions, range region, technology, and others. Ovo and GoPay have their respective advantages in these aspects,” she said.
Go-Pay has been persistent in expanding in cashless payments. Go-Jek announced that Go-Pay usage transactions reached IDR 87 trillion (USD 6.3 billion).
Go-Pay partnered with POS software developer Pawoon, bringing on board tens of thousands of merchants who were already using Pawoon’s systems earlier this year. The platform also collaborated with supermarket chain FoodHall and MAP to increase cashless transactions.
The race for e-wallet is becoming tighter. “The competition is getting very exciting as the platforms are competing to give the best programs for customers. Diverse choices avoid monopolies from one of the providers and there is currently no clear winner, so I’m excited to see what’s going to happen in the next two years,” Subastian said to KrASIA.
Cashless payments are now becoming staple tools for Indonesians. From roadside shops to five-star hotels, Ovo and Go-Pay QR codes should not be missed.
Expect a tighter competition between the Ovo and Go-Pay this year. We are anticipating more and more e-wallet services to sprout in the FinTech sector.