Annual review 2017

Southeast Asia’s digital breakthrough

How GO-PAY leads mobile money in southeast Asia’s largest market

Andre Soelistyo

President, GO-JEK


Financial inclusion is among today’s priorities for the Indonesian government. Late last year, President Joko (Jokowi) Widodo introduced a coordinated national strategy to promote financial inclusion to open up access to financial services for more people. This National Strategy for Financial Inclusion (SNKI) body attempts to raise Indonesia’s financial inclusion rate from 36% in 2016 to 75% by 2019. There is no way to secure such tremendous growth without the contribution of financial technology.

As mentioned in Bank Indonesia’s Digital Financial Inclusion in Indonesia report, a research initiative delivered by Intermedia in 2014 said that the top financial transactions done by the unbanked market are, among others, purchases of goods for daily consumption and payment of public utilities. This shows that the key to ensuring that Indonesia’s unbanked market experiences financial services is by providing easy access to transaction accounts. In this regard, e-money plays a pivotal role as the gate to financial inclusion in Indonesia.

GO-JEK, the first unicorn start-up in Indonesia, has emerged as an on-demand services platform that provides daily needs for Indonesia’s urban market. Our services range from transportation to food delivery to logistics and even home services such as cleaning. In May 2016, we introduced the GO-PAY cashless payment solution to serve millions of daily transactions within the GO-JEK ecosystem. In just eight months of its inception, most GO-JEK transactions have already shifted from cash to cashless using GO-PAY. Additionally, through this approach and working together with banks, more than 300,000 of our driver partners – most of whom were unbankable – are now bankable and entering the gate into financial inclusion.

In July 2017, GO-PAY received a prestigious award from Bank Indonesia Governor Agus D.W. Martowardojo for its success in promoting a cashless society, financial inclusion and small–medium enterprise (SME) empowerment. This was testament to the efforts and energy of all GO-JEK employees, driver partners as well as more than 100,000 SMEs involved in the GO-JEK platform, who continue to promote a cashless society through GO-PAY. As the only e-money that received an award from Bank Indonesia, we are very proud of this accolade. This will motivate us to deliver more innovative financial digital services to help our customers boost productivity for their daily needs and, most importantly, help our SME and driver partners improve their financial well-being.

The key to this success is simplicity in end-to-end digital customer experience. The very beginning of the transaction journey should be easy: our customers can top up their GO-PAY accounts through 13 banks and three switching networks that connect more than tens of banks. When ordering services from GO-JEK, all costs will be deducted automatically. Now, GO-PAY even enables customers to transfer e-money through barcode scanning; and so on and so forth.

Both GO-JEK customers and driver partners experience equal practicality and build the virtuous cycle of satisfaction. If we fail to deliver an excellent experience to our driver partners, they would not be happy to become GO-PAY change agents.

Future opportunities for e-money and a cashless society in Indonesia remain wide open. In general, e-money is still a very small portion of cashless transactions – mobile money is even smaller. E-money (card-based and server-based) is less than 1% of e-payment transactions. By 2015, total e-Payment transactions were at USD0.4bn, which was 0.1% of total debit card/ATM transactions (USD376.8bn) and 1.85% of total credit card transactions (USD21.6bn).

For future development, we see three key factors that can potentially enable Indonesia’s e-money industry to take off and support financial inclusion even further. They are interoperability, security and regulation.

First, interoperability means we need to address expensive top-up fees due to the lack of interconnection between the mobile money company and top-up channels, while at the same time enable the acceptance of mobile money products in more stores and outlets. Secondly, security is the most important feature for customers – one of the surveys revealed that security is the key lever for customers to adopt mobile money. Thirdly, regulation – current e-money regulations only allow IDR20m worth of incoming transactions per month, which can potentially hinder adoption for micro merchants through the customer accounts approach. With these three factors, we can grow closer and closer to the Indonesian Government’s financial inclusion ambition.

Currently, Indonesia is in the transition stage towards a cashless society with only 25% of transactions cashless. When compared to transitioning countries in Southeast Asia, we are above the Philippines (22%) yet still lower than Malaysia (33%) and Thailand (36%). However, as the largest market in Southeast Asia, with a population of more than 250 million, this figure is very promising and we are very happy that GO-PAY is among the front players leading this cashless society transformation.