Consumer Payments Country Snapshot: Indonesia 2016

ATM in Indonesia - Photo by TheInsiderStories

JAKARTA – Cash remains an important traditional payment tool in Indonesia; cards will be used more frequently as the move to non-cash payments accelerates. Providers should increasingly promote card adoption and use merchant partnerships, reward programs, and other benefits to encourage card use, while educating Indonesian consumers about the advantages of using payment cards over cash.

Indonesia’s e-commerce space is forecast to report a compound annual growth rate (CAGR) of 26% over 2016-21 – higher than all other regional markets surveyed. This suggests there is significant future growth potential, which will be driven by an increase in mobile internet penetration, a growing middle class and their disposable income, as well as the use of mobile-first platforms gathering personalized data to target the mobile user.

In spite of recent progress, Indonesia’s payment acceptance network is still underdeveloped, with 1 point of sale (POS) terminal per 246 people and 1 ATM per 2,501 people in 2015. Since smartphone penetration is already on the rise and is expected to reach over 18% by 2021, providers should consider extending the mobile point of sale (mPOS) network as a means of increasing card acceptance among merchants and promoting financial inclusion in the country.

Indonesia remains a cash-driven economy, although new payment technologies are expected to gradually increase in importance, with e-commerce and mobile payments in particular predicted to drive significant growth and opportunities through 2021.

The modernization of the country’s payments infrastructure and the National Non-Cash Movement promoted by Bank Indonesia will support the transition to digital payments. However, this change will take time to spread throughout the market.

Companies mentioned in this report: Visa, Mastercard, American Express, JCB, Bank Rakyat Indonesia, Bank Mandiri, BCA, BNI, PT Bank CIMB Niaga, Bank Tabungan Negara, MoneyGram, Arsema, Xendit, SMBC, Bank Tabungan Pensiunan Nasional, UOB Indonesia, Wirecard, Bank Mega, Samsung, Mozido, Verifone, Finnet Indonesia, Telkomsel Indonesia, Indosat Ooredoo, Apple, Alibaba, Lazada Indonesia, MatahariMall, Bhinneka, Blibli, Zalora Indonesia, Bobobobo, Traveloka, Tokopedia, Bukalapak, Qoo10, Elevenia, Rakuten Belanja Online, Lamido, Ant Financial, Emtek Group, Blackberry, GoSwiff. (Reportlinker)