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tate-owned lender PT Bank Mandiri is aiming for extensive usage of its electronic money (e-money) in the transportation sector as part of its efforts to reach the goal of being one of Southeast Asia's prominent market players in the banking industry.

The lender believes that e-money has the potential to drive the future of business for every bank in the region, according to Bank Mandiri's vice president of electronic banking group Budi Hartono.

Budi said the vision was stated in Bank Mandiri's transformation program for the period 2015-2020 as its strategy to become one of ASEAN's prominent market players.

As of September this year, the bank's e-money transactions grew 10 percent to Rp 1.2 trillion (US$95.04 million), from a total of 4.5 million cards in circulation. Bank Mandiri's e-money transactions accounted for 65 percent of the total nationwide.

As much as 95 percent of the bank's e-money transactions were in the form of transportation-related payments, such as fees on toll roads operated by state-owned highway operator PT Jasa Marga and on public transportation like TransJakarta, he added.

'The remaining 5 percent of Bank Mandiri's e-money transactions were in the retail sector, he added.

Budi said a greater frequency and proportion of e-money transactions in a specific sector would be better rather than increasing the number of cards, as 'e-money is basically designed for the purpose of transactions in the transportation sector, which could also help accelerate the velocity of money in a country's economy.'

Bank Mandiri has also been involved in a pilot project to channel non-cash aid through its e-money to around 1 million people as part of the government's policy to compensate for the fuel-price hikes in November.

According to Budi, the concept of channelling government aid through e-money helps people to learn about saving as well as about the benefits of having access to the banking industry.

Budi added that e-banking was the best strategy to tap more customers with much lower costs, which correlates to the main strategy implemented in the country's financial-inclusion program as campaigned for by the Financial Services Authority (OJK) and Bank Indonesia (BI).

Budi said Bank Mandiri had started investing in its e-money platform to improve the product development for the past two years.

According to Bank Mandiri finance and strategy director Pahala Mansury, the lender will allocate around $180 million as capital expenditure on IT systems, which include e-banking.

According to data provided by Budi, only around 50 million to 60 million people in Indonesia have access to the banking industry, out of a total population of around 240 million, while almost all of the population already has access to mobile phones.

Budi said telecommunication technology had enabled the banking industry to provide services to more people at lower cost and support the fewer cash payments campaign as well.

He cited the 'branchless banking' method in Kenya where Safaricom, a state-owned company has 95 percent market share of non-cash payment services through mobile phone use, and which already counts for around one-third of the country's payments.

'Whereas in Indonesia, around 85 percent of our payments are in cash, which is a heavy cost for the economy. It is impossible for us to get 100 million customers in just a few years through business-as-usual. So, we must change the people's mindset through technology,' he said.