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Bank Mandiri expands digital payment
State lender Bank Mandiri is expanding its digital payment coverage with a new partnership with social media behemoth Facebook
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State lender Bank Mandiri is expanding its digital payment coverage with a new partnership with social media behemoth Facebook.
The companies launched on Wednesday a service that enables people to carry out debit payments for online advertisements on Facebook. Such a payment facility had only been available on two platforms: credit card and local bank transfer.
Mandiri retail banking director Tardi said the new service would help the businesses of around 57.9 million small and medium enterprises (SMEs) nationwide, most of which rely on social media for advertising, including Facebook.
“We predict businesspeople will be more digital-minded within the next five years,” he said, highlighting the importance of digital payments.
Thus, wider entry into digital payment will allow the bank — currently the largest in terms of assets — to tap into higher fee-based businesses.
Mandiri’s financial report shows that its fee-based income stood at Rp 9.19 trillion (US$700.85 million) throughout the first six months of the year, rising by 14.5 percent on an annual basis.
Large chunks of that figure came from administrative fees and transfer and retail transactions.
Mandiri also expects the ease in advertising will drive the number of its customers higher, including funding customers that use its debit cards.
It currently has 17 million customers, which is expected to soar to 20 million by the end of this year. It has also circulated over 13 million debit card users, with an average of 7 million debit transactions per month worth up to Rp 5 trillion.
In terms of SME customers, the report reveals that it has more than 850,000 SME accounts registered, with outstanding internet-related transactions amounting to Rp 118.39 trillion by the end of June.
“As customers’ businesses grow, so will their deposits at Mandiri,” Tardi added.
Facebook Indonesia country manager Sri Widowati claimed that Indonesia was an important country for Facebook.
It had 1.71 billion monthly active users and 1.13 daily active users in June, compared to 1.49 billion and 968 million, respectively, a year ago. Of those users, around 88 million hailed from Indonesia.
No data was immediately available regarding Facebook’s financials in Indonesia. Its global data showed it gained $6.44 billion in global revenue during the second quarter of this year, 59 percent higher from the same period in 2015.
Advertising dominated the revenue with more than 95 percent, in which Asia Pacific made up for 16 percent.
Meanwhile, according to separate data provided by the Communications and Information Ministry, the value of digital advertisement in Indonesia reached $830 million last year, with more than half enjoyed by Facebook and Google.
However, because many of the major social media firms are not yet locally incorporated, all of their income — including from digital advertising — goes to their headquarters abroad.
That has prompted the government to draft a new regulation to push over-the-top (OTT) companies to pay taxes on digital advertising. The regulation is expected to be issued in the third quarter.
By 2020, the government aims to see $130 billion in the value of e-commerce transactions that will contribute significantly to the country’s gross domestic product (GDP). (vps)
