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ocal private payment gateway provider Faspay is cooperating with publicly listed Bank Permata in providing an electronic payment system for the country'€™s mushrooming online shops.

Faspay business development head Eddy Tju said in Jakarta on Thursday that under the cooperation agreement, Bank Permata would provide virtual accounts to be used by buyers to pay for the transactions at any online shops that have registered with Faspay.

'€œStart-up online shops can sign up for the system for free and will only be charged Rp 5,000 (36 US cents) per transaction,'€ he said, adding that the money would come into their accounts only one day after payment.

With the payment system, online shops'€™ customers can pay flexibly from their mobile phones, from ATMs, through e-banking or with credit cards because Faspay has already cooperated with many banks and telecommunication firms, he explained.

'€œIn this case, our merchants and customers need not have accounts in Bank Permata, as we have collaborated with 80 banks nation-wide that link to the virtual accounts in Permata,'€ Eddy explained.

Besides using virtual accounts, payments can be made through e-cash facilities available nowadays in many commercial banks and Blackberry Messenger Money, which can be topped up in any partnered bank, he said.

Bank Permata electronic channel head Indra Gunawan said that the collaboration was useful for the bank in increasing the number of its virtual accounts, one source for its third-party funding. Currently, Permata has 100 corporate e-commerce customers who use virtual accounts. It aims to add 20 to 30 new e-commerce firms monthly next year.

The bank believes that digital transactions will grow significantly in the near future as there is still vast space to improve online purchases.

By the end of 2016, Faspay, a subsidiary of the Astel Group, is aiming to embrace 200,000 start-up
online shops that are now booming on social media like Instagram and Facebook.

'€œSince 2010 we have provided such services for 200 big retailers, like Gramedia, Bhinneka.com, Groupon, Panorama Tours and so forth. Now is the time to help smaller companies as we believe there will be a significant growth of e-commerce in Indonesia within the next two years,'€ Eddy told a press briefing in South Jakarta on Thursday.

According to the Indonesian E-Commerce Association (idEA), most of the transactions at Indonesia'€™s online shops were made with cash.

'€œMany who buy online still pay with cash on delivery. However, that'€™s about to change as we see a shift from offline to online methods that lead to a less-cash society,'€ idEA chairman Daniel Tumiwa said Thursday.

Preliminary data compiled by idEA shows that the cash-on-delivery method fell from 62 percent in 2013 to 25 percent in 2014 and ATM transfers from 66 percent to 41 percent in the same period, while there was simultaneously an increase in credit card transactions from 10 percent to 12 percent.

Daniel, who is also the CEO of online shop portal OLX, said that Indonesia can be the biggest market for digital businesses in Southeast Asia by 2017. In 2013, Singapore, a country of 5.5 inhabitants with a US$1.7 billion market size, was in the first position, followed by Indonesia with more than 250 million residents and a $1.3 billion market. (rbk)