Telkom makes second attempt at online payments
Indonesia’s biggest telecommunication provider PT Telekomunikasi Indonesia (Telkom) has once again dabbled in the e-commerce payment gateway business through the launch of Finpay, an online shopping payment system run by subsidiary, PT Finnet Indonesia.
Finnet focuses on providing electronic payment systems and has offered services such as online bill payments and interbank transactions before going for online shopping payment systems.
The launch of Finpay on Wednesday comes three years after the introduction of Mojopia, the telecommunication giant’s supposed winning platform for online shopping that included a payment system.
The platform, operated by Telkom subsidiary PT Metranet, soon faltered after reports of differences between insiders.
This time around, Finnet aims to acquire 1,000 registered merchants and handle 1 million transactions per month by the end of the year through the introduction of Finpay. The company currently has 150 merchants. The company also provides Finpay services to other e-commerce sites such as plasa.com and melon.co.id, which are also run by Telkom.
Mey Hasibuan, Finpay vice president and head of the online merchant division, said that the company expects the 1 million transactions to be worth around Rp 800 billion (US$84.8 million). She said Finpay would charge fees between Rp 2,500 to Rp 5,000 for every transaction they handled, although the fees could be “tailored” to the size of the merchant.
“Last year, PT Finnet Indonesia’s revenues were around Rp 165 billion and profits were at roughly Rp 13 billion,” she said, adding that the new Finpay service would drive profits up by 75 percent.
She added that Finpay would ride on Finnet’s connection to roughly 50 banks in Indonesia, enabling e-commerce shoppers and merchants to transact across banks via automated teller machines (ATMs), e-banking services and credit cards.
Mey added that the e-commerce industry “has taken off but is growing slowly”, due to various factors, including people’s habit of going to stores as a form of recreation.
“E-commerce, therefore, has a long way to go,” she said.
Nanda Ivens, a digital marketing specialist at XM Gravitate, said that there was still “a huge amount of room for maneuvering” when it came to businesses related to e-commerce.
However, e-commerce sites are often weighed down by costly fees charged by payment gateway service providers. Some providers charged fees between 3 to 5 percent of the total transaction value.
Furthermore, the exponential growth of e-commerce was also encumbered by the lack of a “clear winner” when it came to payment gateway service providers. Such providers in Indonesia include banks, such as BCA with its KlikPay, and non-banks such as Doku, iPayMu and KasPay, which exclusively serves the online community site Kaskus.
“I believe that if there’s a clear winner whom we can actually rely on, the value of e-commerce transactions will go up,” he said.
He added that payment gateway providers had to create products that were “adaptable and nimble” by making products attractive enough for users to want to repeatedly use and recommend to others.
He added that payment gateway service providers also had to put forth a concerted effort in promoting their product, saying that the awareness generated during the launch must be sustained with constant marketing efforts.