Photo courtesy of State-Owned Enterprises Ministry

JAKARTA (TheInsiderStories) – LinkAja, an electronic payment service provider, will focus on public service markets, mainly in public transportation, toll roads as well as gasoline stations, the company’ CEO told TheInsiderStories last month.

Danu Wicaksana, said instead of competing in high end merchant markets that often lead players into price discount wars, the provider, which is controlled by some of the largest state-owned companies in Indonesia, prefers to expand their business through what they call a ‘calculated-risk’ strategy, by targeting niche markets and burn less money to create a more sustainable business model for the company.

As the number of electronic payment service providers have flourish recently, on the back of the rising use of the internet in people’s everyday life, players are often forced to give big price discounts in their service charges, or even lure customers with zero costs for making transactions through their platforms, as they seek to boost the number of users and transaction values.

“We aim to create a completely different ecosystem and take the hard way by not letting our customers stick only to us, just because of the discount. I am afraid that kind of business model isn’t sustainable in the long run,” he said during the interview at the end of August.

He continued, “What happens when company no longer give discount? Also, it is so costly to retain users each month by giving them discount. We want our costs (to incentivize customers) or investment are significantly lower than competitor,” he said.

Wicaksana Danu said LinkAja plans to undertake two or three more funding rounds in the next five years. The company, he said, will prioritize its offering to existing seven shareholders, namely PT Telekomunikasi Selular, PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank Tabungan Negara Tbk (IDX: BBTN), PT Pertamina, and PT Asuransi Jiwasraya.

Despite the priority will be given to existing shareholders, the e-money provider is currently receiving interests from other SOEs and he said its not closing its doors towards any potentials. The other SOEs interested in investing in LinkAja including PT Angkasa Pura II, PT Garuda Idnonesia Tbk (IDX: GIAA), PT Pegadaian, PT Jasa Marga Tbk (IDX: JSMR), PT Kereta Api Indonesia (KAI), PT Taspen, and Perum DAMRI.

“Our business model is to digititalize public services that aren’t touched yet by e-Money like toll roads, public transportations as well as gasoline stations. We will leverage these three anchor businesses to tap into the middle low income markets like people, who travel around not using private drivers. We are targeting those who go by train, taxis, busways. Or people that buy their phone’ prepaid vouchers via our platforms. Sometimes Rp 3,000 could make a big different to their preference,” he adds.

LinkAja currently has active users reaching more than 26 million and registers 180.000 merchants as partner. On top of focusing on their three main segments, the company, according to the CEO, is also expanding their services to tap a bigger market, including for outlets like restaurant, supermarket, e-commerce players, and others.

“We have clear different approached. Imagine in smaller cities, we approach local governments, developers as well as factories over there to digitalize people’ payment. Let’s say we could help with the local government’ trash bill. This would be a good market to tap. Why? because there is no way people will ask discounts when they pay their trash bills,” he revealed.

LinkAja is also looking on the potentials to tap payments for medicine and is currently in talks with BPJS Kesehatan. On top of that, Danu said, there is also business potentials to become the payment provider for the government’s cash subsidy for the rice for the poor.

With regards to its business plans to better tap the toll road ecosystem, Wicaksana admitted that LinkAja is working closely with toll road operator Jasa Marga to test RFID system in 20 toll roads to implement 1000 percent “no barrier SLFF (Single Lane Free Flow)”.

Users will just need to stick FRID tag, and people will only need to top up their balance via LinkAja. For public transportation ecosystem, he continued, the provider is working closely with representative of state train operator KAI, Trans Jakarta so that they can install LinkAja infrastructures into existing entrance gate.

LinkAja is already used in 1,000 gas stations, including those owned by PT Pertamina and those owned through distributed-ownership around the Jakarta.

“Going forward, we’ll strengthen our collaboration with HIMBARA (the association of state-owned lenders). Currently, they open their backend system directly to our system so that our users can top up through stated banks with zero charge. Its something that previously never happened before. They don’t open their system to GoJek or Grab so that their customer still need to pay to middleman (PT Artajasa),” said Wicaksana.

“Next step, we want our user will able to draw cash via ATM without using their debit cards. Also, we will launch a wallet that will allows the state lenders debit cards to be linked with LinkAja. In the future, all the electronic data capture machines will be available in all of our merchants. Currently the swipe machine registers in around 180,000 merchants. ,” he stated.

Written by Yosi Winosa, Email: