Firms form new units to
tap into mobile payment

A number of businesses have set up new units to provide mobile payment solutions to an expanding list of financial service institutions and telecommunications operators in Indonesia amid the projected sharp increase in mobile payments.

Ericsson, traditionally a telecommunications network equipment vendor, has begun to introduce their mobile payment platform and services to prospective clients.

“This is a relatively new area that Ericsson has entered within the past three to five years,” Ericsson sales general manager for mobile money Asia Pacific, Eustace Lobo said.

Under this new business, Ericsson offers a solutions suite of hardware, software and services to enable mobile payments such as money storage, transactions and branchless banking agent management, he added.

Ericsson provides base transceiver stations (BTS) and network solutions to operators including
PT Telekomunikasi Selular (Telkomsel), PT Indosat and PT XL Axiata. These operators have already launched mobile wallet services for their subscribers.

In line with Ericsson, Accenture Indonesia has recently launched an Innovation Center for Financial Services (FSIC) to provide solutions around digital payments. Accenture Indonesia traditionally provides consultancy services to clients in sectors such as financial services as well as information and communication technology (ICT).

Accenture Indonesia managing director, Hendra Godjali, said that the company was still in discussions with several banks to use its mobile payment solutions.

He added that Jakarta is the fourth city globally in which Accenture has set up a financial services center, with the other three centers found in Paris, Chicago and Beijing. “All the right reasons to go digital can be found in Indonesia,” he pointed out.

Bank Indonesia (BI) is running a project aiming to set up branchless banking in Indonesia. Once implemented, branchless banking will enable banks to extend financial services to the large “unbanked” population across the archipelago by utilizing technology such as mobile phones.

Bank penetration in Indonesia remains low, with as many as 62 percent of Indonesian households without a bank account, central bank data previously showed.

Meanwhile, mobile phone subscriptions in the country have surged 2.5 percent year-on-year to 285 million subscriptions in 2013, with the number of 3G services subscriptions hitting 45.4 million, data presented by Accenture shows.

The high penetration of mobile services, coupled by the fact that Indonesia’s youth population is becoming increasingly digitally savvy, creates potential for mobile-driven financial services, according to experts.

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