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Mandiri to team up with South Korean payment firm
State-owned lender Bank Mandiri will team up with a South Korean payment company to further improve the bankâs payment and financial settlement system
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tate-owned lender Bank Mandiri will team up with a South Korean payment company to further improve the bank's payment and financial settlement system.
Bank Mandiri finance director Kartika 'Tiko' Wirjoatmodjo said in Jakarta on Monday that the partnership was part of the enhancement of the bank's digital banking services.
Tiko said the planned joint-venture with the South Korean company would mainly handle payment and settlement services, especially those made through its electronic data capture (EDC) machines.
Through the joint venture, which is expected to launch in the first quarter next year, in the future Mandiri's EDC platform could be open for other banks wishing to utilize its payment and settlement services, he added.
'The partnership will help us to outsource our EDC system through the joint venture, so that in the future we will be able to open our platform to other banks,' Tiko said, declining to mention the South Korean company's name.
Mandiri, along with three other state lenders ' Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI) and Bank Tabungan Negara (BTN) ' are finalizing their integrated ATM system, under the supervision of the State-Owned Banks Association (Himbara).
In order to enable further integration of the system in 2016, the four state banks will acquire a local interbank network provider, dubbed a 'switching company', through a subsidiary of each lender ' known as special purpose vehicles (SPVs).
Mandiri Capital, the bank's newly-established venture capital body, will act as its SPV to partake in the acquisition of the switching company. 'We obtained the [Mandiri Capital] operating permit on Nov. 10 from the Financial Services Authority [OJK],' Tiko said.
'We also have obtained a permit to inject Rp 500 billion [US$36.4 million] for Mandiri Capital, but we will probably start with Rp 300 billion first,' Tiko said, adding that the firm was expected to help link start-up businesses, including young entrepreneurs gathered in its annual Mandiri Young Entrepreneurship program, with funding sources and 'angel' investors.
In addition to the improvement of the Himbara Link ATM Integration, Mandiri also plans to improve payment services for the country's growing e-commerce industry.
As e-commerce grows, Tiko said Mandiri was planning to improve its e-cash service, an electronic money service that enables users to make small payments using their cell phone numbers, through its second-tier subsidiary Mandiri Manajemen Investasi. The product was still being managed by an external developer as of now, he added.
Tiko said Mandiri was also planning to invest in emerging and potential financial technology firms that would be connected to Mandiri's digital platform in the future.
'There will be benefits in more fee-based income and more efficient operating costs, while also gaining from equities we placed in Mandiri Capital,' Tiko said.
Mandiri's fee-based income grew 20.8 percent yoy to Rp 13.15 trillion as of September this year, with a fee income from e-channel transaction contribution that jumped 38.8 percent yoy to Rp 668.2 billion by the end of third quarter.
