In Indonesia, digital transactions are experiencing significant growth, particularly with the increased acceptance and usage of digital and e-wallets. A recent study concluded that a majority (68%) of Indonesia’s younger population use digital wallets at least once or twice a week, with an average top-up value of IDR 140,663; their first experience with cashless transactions paying for online transportation services (40%), or ordering food and beverages through an online delivery service (32%). This shift in payment habits, from cash to digital transactions is linked to convenience, customer service, innovations, practicality, promotions, security, and a widespread acceptance of e-wallets.
Moreover, In February 2020, multinational market research and consulting firm Ipsos, conducted research, with the findings entitled The Evolution of Digital Wallets Towards Business Sustainability. Their research revealed that digital transactions via e-wallets have become an integral part of daily life for millennials born between 1980 and 1996, and Gen Z born between 1997 and 2002, with GoPay being the most recognized e-wallet among millennials and Gen Z (58%), followed by Ovo (29%), Dana (9%), and LinkAja (4%).
This article will discuss the growth of digital transactions in Indonesia, the changing habits of people, and their shift from historical payments of cash or paper money to digital and virtual payments.
In 2021, Indonesia's digital transaction market was projected to reach USD 124 billion or around IDR 1,781 trillion. Wimboh Santoso, Chairman of the Board of Commissioners of the Financial Services Authority (OJK), commented that this potential will make Indonesia one of the countries with the largest digital potential.
Santosa continued, stating at the International Fintech Summit that "Indonesia has one of the largest digital potentials, USD 124 billion. We also encourage non-bank sectors such as fintech and non-financial sectors like agriculture, property, healthcare, and education to integrate into a single financial ecosystem," as quoted by IDXchannnel.com on Sunday, 12 December 2021. The Bank of Indonesia added that their data noted that 2019 there were 4.7 million digital transactions amounting to IDR 128 trillion.
Business owners from micro, small, and medium (MSMEs), to large businesses, should view the growth of digital transactions and the use of digital wallets as an opportunity to increase sales, with the ongoing growth of digital transactions indicating that consumer habits are changing as people are moving from using cash or paper money to using digital money or e-wallets.
As a business owner in today’s highly competitive environment, to maintain growth, profitability, and success your store must be flexible in what payments it accepts, instead of viewing existing and emerging transaction trends as a problem because your current POS system does not yet support digitalized and virtualized transactions.
Rather, your business needs to accept transactions that are not only cash and paper but those that are digital and virtual. As such, before moving forward, it is important to understand what digital transactions are, and the opportunities that they offer both your business and your customer.
Digital transactions are a form of technological advancement that makes it easier for people to conduct payment transactions using devices such as laptops, smartphones, tablets, and websites, and because of this ease of use, digital transactions have become increasingly common, supported, and protected by governments and official financial institutions.
For example, one of the most popular and recognized forms of digital transaction is the e-wallet, which allows transactions to occur via bank integrations, barcodes, or phone numbers.
In summary, today digital transactions are radically changing how people make payments, from cash to cashless payments, from direct payments to transfers, and from traditional wallets to digital, or e-wallets.
The following are the main types of digital transactions currently being used in Indonesia:
E-money, or electronic money, is money that is stored in banking systems for electronic transactions and is often issued with a chip card for transaction purposes and provided by banking and financial institutions.
The following are some Indonesian examples of e-money and their issuing institutions:
Also Read: 4 Types of Cashless Payment Tools for MSMEs
E-wallets are digital services for storing payment data and instruments, which can be used for payments, saving funds, and making purchases. The following are some examples of e-wallets in Indonesia today:
Online banking services allow users to perform banking transactions over the Internet, which includes Internet banking (e-banking) and mobile banking, the difference being that Internet banking requires a browser, while mobile banking uses the Internet, laptops, Smartphones, and tablets.
Also Read: Closing in Business: Definition and Types of Techniques that Can Be Used
The QR code (Quick Response code) is a two-dimensional barcode that contains various types of information. QR Codes can be scanned by using a Smartphone to retrieve data such as text, personal contacts, or URLs. Moreover, QR codes store 2089 digits or 4289 characters, including special characters and punctuation, a feature that makes QR codes ideal for various applications, including payments. However, using a QR code in digital transactions often requires collaboration with digital wallet providers.
The Quick Response Code Indonesian Standard (QRIS) is the standard for integrating various QR codes from Payment System Providers (PJSP). This means that regardless of the provider, any QR code used in transactions can be used anywhere that supports QRIS.
According to Bank Indonesia, users with QRIS can make payments from any QRIS-enabled app, whether a bank or non-bank provider and merchants can accept payments from any application as long as the QRIS standard is implemented.
To stay updated with digital transactions, you can start by using Youtap's Business Solutions app, which has QRIS as one of its features.
By using QRIS, your business can facilitate faster digital transactions and improve its service efficiency.
To learn how to implement QRIS in your business, check out the Start Business link for more details, or contact Youtap directly, to further discuss its Business Solutions applications, and how this feature can help your business grow and become more digitally connected.
Wisma 46 Kota BNI Lt. 29 Jend. Sudirman Kav. 1 Jakarta Pusat, 10220
e-mail: halo@youtap.id
Whatsapp: 08111 500 523
Direktorat Jenderal Perlindungan Konsumen dan Tertib Niaga Kementerian Perdagangan Republik Indonesia
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