Electronic Money Tcash owned by the PT Telekomunikasi Seluler - Photo by Telkomsel
JAKARTA (TheInsiderStories) – Indonesian cellular operator, PT Telekomunikasi Seluler (Telkomsel) built a financial technology (FinTech) provider, PT Fintech Karya Nusantara (Finarya) to support the company’ electronic money business.
Based on the information disclosure released today (01/28), Telkomsel said the formation of the Finarya was held on Jan. 21, 2019 based on the Ministry of Law and Human Rights Agreement on the deed of establishment. The company became the majority shareholder with 99.9 percent ownership of the FinTech company.
“Finarya is a Telkomsel subsidiary engaged in payment system services,” Andi explained in a written statement.
Last year, its holding PT Telekomunikasi Indonesia Tbk (IDX:TLKM) has sharpened its nails in the FinTech business by acquiring a mobile payment company from Hungarian mobile payment company Cellum Global Zrt through PT Metranet, the digital service provider arm by the provider.
The operator has announced will acquire three foreign firms as part of an effort to expand its businesses. Telkom it said dealt with FinTech and satellites, and had a total worth of Rp10 trillion (US$709.22 million) investment to reach it.
Furthermore it said, the move is part of Telkom Indonesia’s merger and acquisition initiative, adding that it would also expand its tower business through its subsidiary, PT Dayamitra Telekomunikasi (Mitratel)
Telkomsel itself had FinTech services in the payment system through TCash electronic money. Currently, the electronic money has 25 million customers in 34 provinces and can be used at 75 thousand merchants. TCash application has also been downloaded more than 8 million times.
In terms of performance, Telkomsel contributed to TLKM’ revenues by recording of Rp23 trillion until the third quarter (3Q) of 2018 or grew 19.8 percent from a year ago. Its holding’ total revenues was Rp99.2 trillion, up 2.27 percent from the previous period which reached Rp97 trillion.
But along with this increase in revenue, operating expenses increased 13.82 percent from Rp61.64 trillion to Rp70.16 trillion. As a result, Telkom only recorded Rp14.23 trillion, a decrease of 20.5 percent from the same period of the previous year which reached Rp17.92 trillion.

FinTech startups in Indonesia have initiated a revolution in the way financial institutions, including banks, in the country are intended work. The presence of the FinTech company has given an opportunity to citizens who have so far never had access to a bank, including those who have no banking saving accounts (because of deposit limits), by offering digital payments  based on smartphone applications.

According to Pricewaterhouse Cooper research, digital payments have become so big across the archipelago that the total transaction value in the “Digital Payments” segment amounted to $18 million in 2017. Additionally, this total transaction value is expected to show an annual growth rate between 2017-2021 of 18.4 percent, resulting in a total of $36 million in 2021.

Popular FinTech categories in Indonesia are lending platforms, capturing 17 percent and marketplaces for financial products, that have occupied 13 percent.

Based on Indonesian data from the Global FinTech survey, FinTech is seen to be either ‘very important’ or ‘important’ by most industry and technology players in Indonesia. Payment systems and fund transfers are seen as the two areas most at risk to move to FinTech over the next five years.

In Indonesia, FinTech participation in digital payments was first set up on 2001, by Kartuku. Kartuku is one of Indonesia’s oldest electronic payments companies, a Third Party Processor and Payment Service Provider offering hardware products such as payment terminals, network access equipment, and card printers and encoders, and software solutions such as transaction processing switch, Internet payment gateway, smart card applications, and terminal line encryption.

US$1: Rp14,100

Written by Staff Editor, Email: theinsiderstories@gmail.com