The COVID-19 pandemic has accelerated the adoption of digital financial technologies across the globe, including in Indonesia. DealStreetAsia DATA VANTAGE, in partnership with the Indonesian e-payment firm LinkAja conducted a study in the first half of this year to capture the penetration of mobile payment applications and how they are affecting micro, small and medium-sized enterprises (MSMEs) that are engaged in offline retail.

Key findings from the study lends support to the notion that the adoption of e-wallets and, to a lesser extent, mobile banking apps have altered the way offline retail merchants do business. Although cash remains king, e-payment has emerged as the most popular alternative for retail transactions. With the adoption level reaching critical mass, new opportunities have emerged in the fintech space to further empower MSMEs as the backbone of Indonesia’s economy.