Indonesia’s Telkomsel, SOE Banks to Merges E-Money Card to LinkAja

JAKARTA (TheInsiderStories) - State-owned Bank Association and Indonesia’ cellular operator PT Telekomunikasi Selular (Telkomsel) to launch a joint electronic money (e-money) called LinkAja on Feb, 21. As planned, TCash and all the e-money card under the SOEs banks will form to be one card LinkAja.

“The official release will be delivered in the near future together with Himbara and the SOEs ministry,” said Telkomsel’ General Manager External Communication Denny Abidin via a short message on Thursday (02/07).

Responding to this, Transaction Senior Vice President of PT Bank Mandiri Tbk (IDX: BMRI) Retail Banking Sales, Thomas Wahyudi explained, LinkAja will present holistic services with various payment features such as electricity bill payments, transactions at outlets, and online purchases.

“We see the business potential of developing card-based electronic money still exists, especially in the business sector with a small ticket size. For an example for payment of parking tickets or public transport tickets, “he said.

While, Director of PT Bank Tabungan Negara Tbk (IDX: BBTN), Budi Satria, said the SOEs ministry indeed encouraged state-owned banks to work together to deepen the e-money market in Indonesia. He added, “The SOEs banks is expected to be able to synergize its e-money with TCash and introduce the LinkAja brand based on QR Code.”

In developing LinkAja, BBTN will combine the network of merchants that it already has. With the establishment of LinkAja, Satria hopes to encourage the growth of payment transactions by using e-money, while at the same time encouraging a less cash society in the country.

Bank Indonesia has launched the Quick Response (QR) code payment standardization to support cashless payment in the archipelago. Head of transformation fro the Bank Onny Widjanarko, said the standardization is an initial stage to control the safety of this cashless payment before the central government issues the official regulation of QR code.

The companies that already obtained the permission from the central bank using QR code need to comply with the standard. There are 12 companies that have obtained permission from the central bank using the QR code including Go-Pay, TCash, OVO, BNI Yap!, and BRI. The standardization will connect each other of these 12 companies.

The central bank has appointed the Indonesia Payment System Association, an institution established by Bank Indonesia involving representations of all payment system industry, to set the standard. The agency is authorized in technical scope to formulate rules in the payment system industry.

The QR code standardization and regulation will be part of the National Payment Gateway program that launched last year. The NPG is an electronic payment transaction system incorporating instruments such as ATM cards, electronic money, and credit cards, allowing customers to carry out secure non-cash transactions from any bank in Indonesia.

Indonesia is, in fact, lagging behind other developing countries, such as India, Bangladesh or even Palestine, which have already set in place their own integrated cashless payment.

Through the system, respective institutions will be able to obtain valuable data (that which information technology practitioners call ‘big data’) by observing public spending patterns, lifestyles, trends as well as the export-import traffic.

This is same data that the old players, namely Visa and MasterCard, capitalize on to enhance their marketing strategies. The integrated cashless payment will also enable the country to make use of ‘big data’ to develop better-targeted local e-commerce.

The ease of online payments will give the creative economy a big boost. Tax payments can also be monitored better through increased non-cash transactions.