Mobile phone operators may be expanding the number of e-wallet merchants, but strategic positioning of those services is the real key to getting more people to use the facility and move closer toward aspirations for a “cashless society”.
Telkomsel, Indonesia’s largest mobile phone operator, aims to increase the number of people using their e-wallet services by 25 percent this year, or roughly equal to 10 million users. “The number of people using Telkomsel e-money facilities, consisting of T-Cash and Tap-Izzy, has only amounted to 8 million users,” Telkomsel spokesman Ricardo Indra told The Jakarta Post.
However, the number of subscribers is conspicuously less than the total size of the operator’s mobile phone service users, which shot past 100 million last year.
Introduced in 2007, T-Cash enables its subscribers to perform micro-payments below Rp 1 million (US$111) from their accounts through short text messages. The transaction value limit is based on the Bank Indonesia regulation on e-money. Bank Indonesia has also campaigned for the use of e-money in their effort to realize a cashless society.
Tap-Izy, on the other hand, uses a SIM card equipped with Radio Frequency Identification (RFID) technology, allowing people to tap their phones on devices available at cashiers when making payments.
In addition to the relatively low number of users, the use of e-wallets has been limited as well, given that this payment system is mostly used for phone credit top up.
According to Ricardo, the e-wallet facilities were mostly used by subscribers between 25 to 40 years old who live in “small cities at the district level”.
Yessie D. Yosetya, senior general manager for M-Payment at mobile phone operator XL, added that their e-wallet facility, XL Tunai, was largely used for mobile phone credit purchases “with an average credit top up of Rp 50,000”.
“The use of electronic money is still in the introductory stage. Hence, people are not yet fully familiar with the service. This is what we hope to improve in the future,” she added.
Djarot Handoko, spokesman for mobile phone operator Indosat, added that educating people on the use of the e-wallet was one of the factors in boosting its use by society.
PT Indosat runs an e-wallet service, which they call DompetKu.
“There are plenty of factors which could spur the growth of mobile payment, starting from educating and informing the public, increasing the number of merchants, to enriching the features of the service,” he told the Post.
Besides cooperating with state-owned electric company PT PLN, Indosat is also working with Alfamart mini markets for their DompetKu service. XL has collaborated with around 10 merchants while Telkomsel has worked with at least seven types of partners, including Indomaret mini markets and Cinema 21 for Tap-Izy.
Technology observer Andy Zain, however, pointed out that operators had to make e-wallet services available at more strategic places beyond minimarkets.
“People can pay by cash, debit card or credit card at minimarkets, and not necessarily with e-wallets from operators,” he said, adding that paying by SMS at certain places was a hassle instead.
He added that operators have to spot “usage scenarios” — activities which people found suitable to make payments through mobile phones.
“A benefit of mobile payments is that they are secure and can be done from remote areas. These factors are more suitable for money transfers,” he added.
He further said that operators should inform the public more on where people could top up their accounts, such as through ATMs. “Operators must also make their services visible at touch points,” he noted.
He added that an ideal way to get people using mobile e-wallets is to integrate the wallet with phone credits, thereby eliminating the need for people to first subscribe to e-wallet services.
“However, this is not legally approved because the valid payment method is money, not phone credit,” he said.
Operators, however, will continue betting on their e-wallet services.
“This is in line with global trends,” Ricardo said, pointing out mobile wallet trends for micro-payment in Philippines, as well as other Asian and European countries where the technology is used for paying public transport fees.
“Telkomsel views that this potential could also be applied in Indonesia in the near future,” he commented.
GCash, from Philippines-based telecom Globe, could also be used for remittance transfer to facilitate the approximately 200,000 Filipinos living and working in Qatar, their website mentioned.
XL has plans to expand their services this year, such as enabling the transfer of money between XL Tunai users, on top of increasing their number of merchants.
“XL is developing this service [sending money] which is set for launch by April 2012 at the latest,” Yessie said.
Telkomsel will up their game as well by expanding their merchant list.
“In the near future, Alfamart stores will also make available payments using Tap-Izy so that customers would receive service from around 1,500 Tap-Izy counters in total,” Ricardo said.