The Opportunities and Challenges of the Payments Industry in Indonesia, Forecast to 2025

The Opportunities and Challenges of the Payments Industry in Indonesia, Forecast to 2025

eWallets Growth is Rapid but Cash will Still be King for Now

RELEASE DATE
27-Jan-2020
REGION
Asia Pacific
Research Code: 9ABE-00-4F-00-00
SKU: TE03915-AP-MR_23894

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Description

The growing number of people of working-age, greater financial inclusion, increasing literacy levels, and growing internet penetration present a significant opportunity for the payments industry in Indonesia. The industry has recorded positive growth in terms of transaction value from US$ 333 billion in 2013 to an estimated US$ 563 billion in 2019. Growth is especially rapid in the mobile payments segment, where the transaction value recorded until September 2019 has already more than doubled compared to the transaction value recorded in 2018. Within ASEAN members states, Indonesia accounted for more than 40% of the population in the region and a third of the region’s annual GDP. However, Indonesia’s mobile payments industry only accounted for 27.6% of the total mobile payments transaction value in the region. This represents a gap and a potential market opportunity that the local regulator together with industry players are actively working to address. As is, the payments industry in Indonesia is still very fragmented. Although growth prospects for the payments industry in Indonesia are positive, the industry still needs to address various challenges. A majority of the population in Indonesia is still heavily reliant on cash in their daily activities. Many are hesitant to begin using digital payments due to security concerns. Moreover, the country’s large population and geographical spread presents a challenge to building an integrated digital payments ecosystem and infrastructure. Initiatives are being taken by the local regulators and industry players to address these challenges. Newly minted regulations places emphasis on the interoperability and security of digital payments, thus increasing user convenience and trust. Meanwhile, market players are offering incentives for users to use their payments platforms, thus encouraging users to reduce their dependence on cash. Market players are starting to think about strategies to drive adoption beyond major cities and focus on rural areas as well.

This study also briefly analyses growth opportunities in the payments industry, such as within the online payments industry and with regards to cross-border payments. With the advancement in technology, such as with omni-channel marketing and with the ISO20022 standard, the market will have the capability to provide more innovative solutions to address the challenges and be better able to meet the demands within the market segments. This study is based on extensive secondary research supported by in-depth primary research.

Companies mentioned in this study include, but are not limited to 2C2P, Alto, American Express, ATM Bersama, Bank Bukopin, BCA, BNI, BRI, CIMB Niaga, Citi, DANA, Dooet, Doku, Espay, Faspay, GoMobile, Go-Pay, indoPay, iPaymu, iSaku, Jenius, Link, LinkAja, Mastercard, NicePay, OVO, Panin Bank, Paytren, Permata Bank, Prima, Sakuku, Standard Chartered, UnionPay, and VISA.

Countries covered in ASEAN mobile payments market include Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

Key Issues Addressed

  • What are the trends in the payments industry in Indonesia?
  • Who are the key market players and what are their product/service offerings?
  • What are the key updates on government regulations and standards for the payments industry in Indonesia?
  • What are the growth opportunities for the payments industry in Indonesia?
  • What are the key challenges for the payments industry in Indonesia?

Analyst: Mei Lee Quah

Table of Contents

Executive Summary

Market Definitions

Key Questions this Study will Answer

Forecast Assumptions

Transaction Value by Payments Instruments Forecast

Transaction Value by Payments Instruments Forecast Discussion

Active Mobile Payments Customers and Transaction Value Forecast

Active Mobile Payments Customers and Transaction Value Forecast Discussion

Mobile Payments Transaction Value Forecast among ASEAN Member States

Mobile Payments Transaction Value Forecast in ASEAN Member States—Discussion

Indonesia Payments Market—Overview

Indonesia Payments Market—Key Participants

Indonesia Payments Market—Drivers

Indonesia Payments Market—Drivers Explained

Indonesia Payments Market—Drivers Explained (continued)

Indonesia Payments Market—Restraints

Indonesia Payments Market—Restraints Explained

Indonesia Payments Market—Restraints Explained (continued)

Indonesia Payments Market—Analysis

Indonesia Mobile Payments Market—Overview

Indonesia Mobile Payments Market—Key Participants

Indonesia Mobile Payments Market—Key Participants (continued)

Indonesia Mobile Payments Market—Drivers

Indonesia Mobile Payments Market—Drivers Explained

Indonesia Mobile Payments Market—Drivers Explained (continued)

Indonesia Mobile Payments Market—Drivers Explained (continued)

Indonesia Mobile Payments Market—Restraints

Indonesia Mobile Payments Market—Restraints Explained

Indonesia Mobile Payments Market—Restraints Explained (continued)

Indonesia Mobile Payments Market—Analysis

Mobile Payments on a Regional Level

Mobile Payments on a Regional Level (continued)

Mobile Payments on a Regional Level (continued)

Mobile Payments on a Regional Level (continued)

Payment Methods within the Internet Economy

Payment Methods within the Internet Economy (continued)

Payment Methods within Internet Economy (continued)

Growth Opportunity 1—Push Towards a Cashless Society

Growth Opportunity 2—The Internet Economy

Growth Opportunity 3—Cross-border Payments

Strategic Imperatives for Success and Growth

Conclusions and Recommendations

The Last Word—3 Big Predictions

Legal Disclaimer

List of Exhibits

The Frost & Sullivan Story

Value Proposition—Future of Your Company & Career

Global Perspective

Industry Convergence

360º Research Perspective

Implementation Excellence

Our Blue Ocean Strategy

Related Research
The growing number of people of working-age, greater financial inclusion, increasing literacy levels, and growing internet penetration present a significant opportunity for the payments industry in Indonesia. The industry has recorded positive growth in terms of transaction value from US$ 333 billion in 2013 to an estimated US$ 563 billion in 2019. Growth is especially rapid in the mobile payments segment, where the transaction value recorded until September 2019 has already more than doubled compared to the transaction value recorded in 2018. Within ASEAN members states, Indonesia accounted for more than 40Percentage of the population in the region and a third of the region’s annual GDP. However, Indonesia’s mobile payments industry only accounted for 27.6Percentage of the total mobile payments transaction value in the region. This represents a gap and a potential market opportunity that the local regulator together with industry players are actively working to address. As is, the payments industry in Indonesia is still very fragmented. Although growth prospects for the payments industry in Indonesia are positive, the industry still needs to address various challenges. A majority of the population in Indonesia is still heavily reliant on cash in their daily activities. Many are hesitant to begin using digital payments due to security concerns. Moreover, the country’s large population and geographical spread presents a challenge to building an integrated digital payments ecosystem and infrastructure. Initiatives are being taken by the local regulators and industry players to address these challenges. Newly minted regulations places emphasis on the interoperability and security of digital payments, thus increasing user convenience and trust. Meanwhile, market players are offering incentives for users to use their payments platforms, thus encouraging users to reduce their dependence on cash. Market players are starting to think about strategies to drive adoption beyond major cities and focus on rural areas as well. This study also briefly analyses growth opportunities in the payments industry, such as within the online payments industry and with regards to cross-border payments. With the advancement in technology, such as with omni-channel marketing and with the ISO20022 standard, the market will have the capability to provide more innovative solutions to address the challenges and be better able to meet the demands within the market segments. This study is based on extensive secondary research supported by in-depth primary research. Companies mentioned in this study include, but are not limited to 2C2P, Alto, American Express, ATM Bersama, Bank Bukopin, BCA, BNI, BRI, CIMB Niaga, Citi, DANA, Dooet, Doku, Espay, Faspay, GoMobile, Go-Pay, indoPay, iPaymu, iSaku, Jenius, Link, LinkAja, Mastercard, NicePay, OVO, Panin Bank, Paytren, Permata Bank, Prima, Sakuku, Standard Chartered, UnionPay, and VISA. Countries covered in ASEAN mobile payments market include Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.--BEGIN PROMO--

Key Issues Addressed

  • What are the trends in the payments industry in Indonesia?
  • Who are the key market players and what are their product/service offerings?
  • What are the key updates on government regulations and standards for the payments industry in Indonesia?
  • What are the growth opportunities for the payments industry in Indonesia?
  • What are the key challenges for the payments industry in Indonesia?

Analyst: Mei Lee Quah

More Information
No Index No
Podcast No
Author Mei Lee Quah
Industries Telecom
WIP Number 9ABE-00-4F-00-00
Is Prebook No
GPS Codes 9702-C1,9705-C1,9657,9838-C1,9A66-C1,9B07-C1