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Jakarta Post

As noncash payments rise, Bank Mandiri allocates less cash for year-end holidays

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, December 17, 2019   /   11:55 am
As noncash payments rise, Bank Mandiri allocates less cash for year-end holidays An employee moves packs of bank notes to the cash pool at Bank Mandiri in Jakarta. (The Jakarta Post/Seto Wardhana )

Indonesia’s largest bank by assets, state-owned Bank Mandiri, has allocated less cash than it did last year to meet consumer demand to draw from deposit accounts that is expected to peak during the Christmas and New Year's Eve holidays.

The managing director of consumer and retail transactions, Hery Gunardi, said on Monday that Bank Mandiri has prepared Rp 33.5 trillion (US$2.3 billion), or Rp 1.1 trillion on average per day, in cash for between Dec. 2 and Jan. 2.

The figure was 26 percent higher than the normal allocation outside the holiday season. However, it was slightly lower than last year’s year-end allocation because of the increasing trend of customers preferring to use electronic payment methods, he said. Bank Mandiri in 2018 allocated Rp 33.6 trillion.

"Cash payments have become increasingly less common nowadays. People pay their bills via Mandiri Online Service or ATMs," Hery told reporters, adding that most of the bank's total transactions were now conducted in those ways.

As much as 85 percent of the cash for this year’s holiday season will be allocated for the bank's 18,291 ATMs and the remaining 15 percent for its branch offices, according to the director.

He said that customers used ATMs or other cashless methods to pay for, among other things, hotel reservations, airline and train tickets and clothes during the Christmas and New Year's Eve holidays.

Hery said the number of transactions was expected to reach 2,464 per second during the Christmas holiday and 2,775 during the New Year's Eve holiday, far higher than the average of 803 to 1,000 transactions per second during normal business days.

The state-owned lender is expecting increases in total transactions as its customer base has increased recently to 20 million from 18 million as of 2018, according to Hery. 

To encourage more transactions at its partnering merchants, Bank Mandiri is promoting special offers, such as offering a Mini Cooper car in a lottery for customers using the bank's services. It will provide customer support services 24 hours a day during the holiday season and provide card-swipe machines at shopping malls organizing midnight sale events.

During the Christmas holidays, Bank Mandiri plans to operate 128 branch offices on Dec. 24 and 78 offices on Dec. 25. For the New Year's Eve holidays, the bank plans to operate 324 branch offices on Dec. 31 and 90 offices on Jan. 1. (dfr)