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Digital payments still have a long way to go in Indonesia
The MasterCard Innovation Forum reflects the growth in technology-based digital payment in Internet-mature countries, which still remain a challenge for emerging countries, including Indonesia, due to safety and security issues
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The MasterCard Innovation Forum reflects the growth in technology-based digital payment in Internet-mature countries, which still remain a challenge for emerging countries, including Indonesia, due to safety and security issues.
Purchasing tickets and booking hotel rooms online have gained ground among Internet-savvy Indonesians and young business executives, like Ario, who have become familiar with e-commerce.
'When I needed bike parts, including a frame and a front set, I bought them online from a bicycle shop overseas. I placed an order with shops in Germany and the US,' said the quality-conscious cycling enthusiast.
'I paid with my credit card and it took several weeks for the goods to reach me,' he said, taking pride in having a bike with imported parts.
The 35-year-old executive has also taken advantage of other online facilities, such as OpenTrollyBookStore, a Singapore-based online bookstore, Berniaga.com and OSL.com to buy goods that he needs.
Those accustomed to online shopping, or e-commerce, are familiar with non-cash payments, something they could not do a couple of decades ago when the IT required had yet to be developed.
While online shopping is showing an upward trend in Indonesia, efforts to develop digital payment gateways that offer an easier, more convenient, safer and more secure payment method continue to be made by IT companies, in partnership with banks and merchants.
MasterCard, a technology company in global payments industry, is one of these companies engaged in continuously developing the digital payment infrastructure.
The company showcased several consumer-favorable digital payment solutions in its Innovation Forum held in Singapore recently.
At least 350 participants from Southeast Asia, the Middle East and Africa, and expert speakers from MasterCard and within the industry, attended the two-day MasterCard Innovation Forum from Sept. 24-25. Conference sessions and panel discussions covered trending topics, such as digital convergence; mobile, travel, financial inclusion; big data and security.
The MasterCard Showcase stole the show, however, with participants' attention fixed on payment technology highlights.
Explaining the easy, safe and secure features that MasterPass offers, a booth assistant, said, 'This digital payment platform allows consumers to shop online, or from their mobile, without having to re-enter detailed shipping and card information every time they shop at MasterPass merchant sites.
'It simplifies the payment experience by storing shipping, personal and card information, while protecting users' card and personal details, to make digital checkouts much easier,' he added.
He said that with MasterPass, a digital wallet, consumers could, for example, make taxi payments. 'MasterPass can display any card available in your wallet. Any smartphone can be used to make the payment, as long it has a MasterPass account,' he said.
'We are now working with several taxi companies in different market across Southeast Asia to develop or integrate the digital payment into their apps,' he said, adding, 'Definitely, Indonesia is one of the markets we are looking at.'
Visitors to the MasterCard Showcase also had the opportunity to see MasterCard's Shop This! with MasterPass, a facility designed to let consumers discover and purchase items while watching TV or reading the advertising and editorial pages of their favorite magazines, without ever leaving the page itself.
'While watching TV, you can order and purchase goods that you see on TV,' said an assistant, demonstrating how it worked. Normally shopping online requires a credit card number, which concerns consumers who are worried it is not secure. But with the MasterCard wallet, 'No one has access to your credit card number as you do not have to give it. Therefore it is safe and secure,' he noted.
'We also have a digital magazine through which you can place an order while reading, thanks to the MasterPass account,' he said.
Movie lovers can order a drink or snack while sitting in their seats by using Qkr with MasterPass. 'Qkr is a mobile payments platform that enables consumers to order and pay for goods and services directly from their smart device,' said another booth assistant.
MasterCard Asia Pacific group head for emerging payments, Raj Dharmodaran, acknowledged that convenience, safety and security were all major concerns for consumers when making digital payments, but that different markets had different priorities.
In markets like Indonesia, safety and security were the top priority, while other markets tended to prioritize convenience, he said.
Technologically speaking, 'Safety and security aspects have been developed, including the use of one secure code.'
On the convenience side, great strides in digital payments has been made with the MasterPass wallet platform, commercially launched in several countries, including the US, the UK and other European countries, Canada, Australia, New Zealand, Singapore and China.
Other countries would follow, including Indonesia, he said.
Infrastructure
According to Dharmodaran, each country has a different level of digital payment growth, with developed digital payments in a market followed by developed e-commerce. 'Commonly, the development of e-commerce in any country is divided into two categories: travel and retail. The development of e-commerce in a country starts with travel and retail follows.'
'Travel, such as online ticket purchase and hotel room booking, for example, does not require logistics to ensure the ticket or information on the availability of room that you have ordered reaches you,' he explained.
'But when it comes to online retail, the supporting infrastructure, including warehouses and shipping logistics, should be built,' he said.
'I think given the size of Indonesia, it may take some time before digital payments are widely used for retail e-commerce because the required infrastructure will have to be in place first,' he pointed out.
He also highlighted the importance of regulatory framework that supports the growth of digital payments, saying that a country should have globally standardized regulations conducive to the growth of digital payments.
'I think a country should have a clear guideline on what a digital payment is, to make consumers comfortable and foster convenience with online payments. Establishing trust in digital payments is very important in this regard,' he said.
Meanwhile, MasterCard's president of Asia Pacific and global accounts, Vicky Bindra, was upbeat about the rapid development of technology in the payment industry.
'The role of technology in driving change across the world is unprecedented today, and nowhere is this more important than in the payment space, where we've already seen how innovation ' whether in providing access through physical cards or via mobile devices, has allowed millions more people to participate in the formal economy, benefiting themselves, their families and their communities,' Bindra noted.
MasterCard chief innovation officer Garry Lyons said, 'Consumers' needs and demands are getting sophisticated ' they want faster, easier and safer transactions, regardless of where they are and what they do.
'We believe that technology has the capability to provide exactly that and much more ' transforming the entire consumer experience to one that is seamless with all of their everyday activities.'
