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INTRODUCING INDONESIA MOBILE PAYMENT REVIEW 2022

A data-driven view on how financial technologies are disrupting offline retail in Indonesia

INTRODUCING INDONESIA
MOBILE PAYMENT REVIEW 2022

A data-driven view on how financial technologies
are disrupting offline retail in Indonesia

 

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.

How digital finance is fostering inclusion and transforming Indonesia’s MSME industry
  • Mobile payments have reached critical mass when it comes to adoption with 97% of offline MSMEs becoming a part of Indonesia’s digital economy.
  • The pandemic was a major accelerant — mobile wallet adoption doubled through this period. Before the pandemic, it stood at a mere 23%.
  • Convenience and discounts are the main reasons driving mobile wallet adoption, with the former winning the day.
  • While cash still rules, e-wallets are catching up — emerging as the second most preferred payment mechanism.
  • MSMEs are showing an increasing preference for e-wallets over traditional banking.

These were just some of the topline findings of an upcoming research-backed report on the digital finance industry in Indonesia created by DealStreetAsia, and sponsored by LinkAja.

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The financial inclusion opportunity in the digitalisation of MSMEs