Eye on Asia: Pandemic proves Indonesia primed to embrace digital payments.

With the emergence of digital payment methods being adopted rather quickly around the world, it’s quickly gaining a certain amount of preference over cash payments, which is especially apparent in the middle of the COVID 19 pandemic that doesn’t seem to be going away anytime soon, digital might just seem like the way to go. 

In light of the events following Indonesia’s social-distancing protocol, non-essential businesses are mandated to temporarily close their places of business. This changed a few months ago when businesses like restaurants and nightclubs started reopening despite the ever-climbing number of cases throughout the country. Indonesia has always been known as a country that favors cash payments. No matter where you’re coming from, you’ll always be advised to carry cash with you when visiting Indonesia. In 2020 though, Indonesia should start considering moving everything to digital payment methods. Let me explain. 

Indonesia’s infrastructure is quite adequate for merchants to embrace digital payment methods, with fiber optic internet available at almost every major city in the country. This makes it much easier for merchants to start using digital payment methods, of which there are many. In recent memory, there has been a rise in companies offering to provide solutions for merchants who do not want to go through the trouble of having to provide exact cash change for their customers, something that is increasingly more frowned upon due to the spread of the Coronavirus, which can survive on hard surfaces for up to 9 days, and on cash bills where it can stay for hours. This is something that business owners will have to think about since risking using cash payments will eventually put their employees’ health at risk. 

Kinokuniya Bookstore in Jakarta.
Trio Mining restaurant in Jakarta.

Digital payment methods are also very simple to use and since according to a survey done in 2016, approximately 43% of the Indonesian population carry a smartphone, that number has since increased to approximately 70.05% of the population, meaning digital payment methods would be much easier to implement now than it had ever been in the last decade. Digital wallet apps such as the ever-popular OVO is readily available on the app stores of the respective smartphones that Indonesians carry and can be downloaded at no additional cost.

A simple registration process makes these digital wallet apps a very compelling option to have, especially since all the customers would need to do is scan a barcode unique to a particular place of business, input the exact amount that they are charged with, and authenticate their payment.

Simple as that.

There is no physical contact during any step of the process which just makes it that much more secure when it comes to transmitting and contracting a particular disease. It’s also much more convenient for both the consumer as well as the business since this means that businesses will no longer need to deposit their revenue to the bank which means more contact with things that may or may not have been disinfected, it’s much safer and much more convenient. 

Indonesia’s digital infrastructure is ready for the transition to digital payments.

Though several arguments can be made for those who live in rural areas without access to the internet where cash would be their only option. This will presumably see a change in the coming years as the country expands its internet coverage throughout the archipelago.

Another parallel can be seen from its closest neighbor, Singapore, where digital payments like Apple Pay and Google Pay have been integrated into the everyday lives of its citizens that paying with cash is now seen as something that largely only tourists do. There are even certain establishments in Singapore where the only accepted payment method is cashless, either by using a credit/debit card or via any of the aforementioned digital payment options. 

It’s true that Indonesia still has a ways to go to catch up with its contemporaries, but I’d argue that the resources are already available, and options are plenty. All that the country of 270 million strong needs to do is to integrate it and promote its use while also actively expanding its internet coverage to its rural areas. 

WORDS: Jovi Harrison

IMAGE SOURCE: Creative Commons

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