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Indonesia’s thriving payments sector to drive an interconnected ASEAN consumer class
Indonesia is among the Southeast Asian markets that witnessed strong shifts toward non-cash payments, with an overall 30 percent growth in transaction volume from 2016 to 2021. This is expected to increase by more than five times by 2031.
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Scan and pay: A buyer pays his bill using Quick Response Indonesia Standard (QRIS) code at a street foodstall on Jl. Ampera Raya in South Jakarta on Feb. 6, 2021. Bank Indonesia estimated 12 million micro, small and medium enterprises would shift to the cashless payment method in 2021. (Antara/Reno Esnir)
T
he race for advantage in the payments sector continues worldwide with an anticipated total revenue pool expected to double to US$32 billion by 2030, up from about $15 billion this year. Boston Consulting Group’s 20th edition of our trademark global payments analysis has revealed that as economies return to business as usual, the payments industry remains buoyant and upbeat, bolstered by increased competition, higher rates of “platformization”, innovative disruption and increased involvement from regulators, governments and central banks.
The Asia-Pacific region too has witnessed strong growth for payments, with non-cash payment transaction volumes increasing 28 percent from 2016 to 2021 and expected to grow at a healthy 17 percent in the next 10 years.
Indonesia is among the Southeast Asian markets that witnessed strong shifts toward non-cash payments, with an overall 30 percent growth in transaction volume from 2016 to 2021. This is expected to increase by more than five times by 2031.
The country also saw strong growth in card transactions per capita in the past five years, driven mainly by higher debit card usage. With Indonesia set to become the fourth-biggest consumer market in the world by 2030, behind China, India and the United States, these trends will continue.
To drive digital payments adoption, Bank Indonesia (BI) has released the Indonesia Payment System Blueprint 2025 (BSPI), launched the Indonesian Standard QR Code (QRIS) and lowered merchant discount rates (MDRs). However, the low-to-no margins from QRIS coupled with the low MDR fee structure are likely to push businesses, such as fintechs and banks to seek alternate revenue sources.
Disruptive regulation changes
