Contrary to the common assumption that FinTech benefits are only enjoyed by those who are technologically literate and connected to the internet, research conducted by the Indonesian Institute of Sciences (LIPI) found that those who are marginalized in regard to technological access and capability can better adopt digital payment methods.
inancial Technology (FinTech), especially in terms of digital payments, has the immense potential to be utilized in Southeast Asia’s largest economy, Indonesia. According to the Report of Indonesian Internet Service Providers Association (APJII) in 2017, over 140 million Indonesians have access to the internet, of which 93 percent have smartphones or tablets.
Moreover, 73 percent of them are 19 to 34-year-old, highly mobile “digital natives”. This age group generally not only evaluates products or services — including payment options — solely from their function or utility, but also their convenience of use, delivery time and efficiency. The adoption of digital payment services delivered by FinTech providers can fulfill such a demand as it makes payment transaction more efficient, practical, instant (one-touch payment) and secure.
Interestingly, contrary to the common assumption that FinTech benefits are only enjoyed by those who are technologically literate and connected to the internet, research conducted by the Indonesian Institute of Sciences (LIPI) found that those who are marginalized in regard to technological access and capability can better adopt digital payment methods. This is supported by the findings of a partnership between a digital payment FinTech Provider, Mandiri e-Cash and a local cooperative in Nusa Tenggara Barat named Wira Singa.
We conducted a survey involving 46 respondents who were users of four FinTech companies, namely e-Cash, T-Cash, OVO and TokoCash. Later, the analysis will be based on two classifications: e-Cash users who created an e-wallet account through a local cooperative, and the other three FinTech users, called “General” FinTech users, who made a direct partnership with FinTech providers so that they can accept payments using those platforms.
The first category lives in rural areas, whereas a majority of the latter are running a business in center of the city. The inclusiveness of e-Cash services can be seen mainly from two aspects other than their rural-urban differences. First, while all general FinTech users own at least a smartphone and have internet access, 65 percent of the e-Cash users only own a phone that only be used for calling and texting using Short Message Services (SMS). Second, a majority of them (65 percent) also lack internet connection.
Innovative services provided by e-Cash allow them to enjoy the benefits of digital payments as they do not require a smartphone nor internet connection. While general FinTech companies requires an internet connection for an Electronic Data Capture or QR code scanning feature to make a payment, e-Cash payments can be done from a conventional phone through Unstructured Supplementary Service Data, a service resembling SMS.
Currently, there are about 300 villagers — mostly farmers and small retailers — who have opened an e-Cash e-wallet account. By creating an e-wallet, they can enjoy several advantages. First, purchases and sale transactions such as the purchase of agricultural equipment between users of
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