The Jakarta Post
Digital financial services firm Visionet International (OVO) plans to grow its services and subsequently help boost the sector by collaborating with more investment firms, insurance companies and lending platforms in 2021.
OVO CEO Jason Thompson said he believed the move would help accelerate the growth of Indonesia's financial technology sector.
“We don’t believe in the isolated, closed ecosystem approach as no platform can solve the country’s many payment problems alone,” he said on Wednesday during a conference hosted by Tech in Asia. “Collaboration will lead us to profitability.”
Earlier in May, OVO partnered with insurance firm Prudential Indonesia to provide premium-free life insurance covering accidents and COVID-19 treatment within its platform for a limited period.
Thompson said OVO had so far been able to withstand the effects of COVID-19, with a 267 percent increase in new users and 97 percent user retention rate during the global health crisis.
He added that the company had also seen a 20 percent budget improvement and OVO was “on track financially even during COVID-19”.
The company told The Jakarta Post in September that it expected its fourth-quarter revenue to be 7.4 times that of the January-March period last year, propelled mostly by growth in payment services.
Last year, Lippo Group sold over 70 percent of its stake in OVO over worries that the e-wallet business was not sustainable, citing its high level of spending. At the time, Lippo Group was paying Rp 700 billion (US$47.6 million) to OVO per month.
However, the pandemic has helped accelerate the adoption of digital services in Indonesia as consumers avoid COVID-19 virus transmission from direct contact.
In a 2020 report titled “Digital Consumers of Tomorrow, Here Today” commissioned by Facebook, global consultancy firm Bain & Company found that Southeast Asian consumers were embracing contactless payments as the preference for e-wallets grew at the expense of cash payments.
E-wallets saw their popularity increase by 8 percentage points, with 22 percent of consumers saying they preferred e-wallet payments in 2020 — almost equal to the proportion of those who preferred credit and debit cards.
OVO, one of Indonesia’s unicorns valued at around $2.9 billion, is one of the most popular e-wallets in the country.
An earlier survey by global fintech organization Rapyd conducted between March and April this year showed that OVO was the most preferred payment method over debit cards, ATM transfers and other e-wallets.
However, a MarkPlus survey, conducted in the third quarter period this year, showed that newcomer ShopeePay has outperformed other e-wallets in the second quarter this year, including OVO. The report’s author cited ShopeePay’s vigorous marketing efforts and the rise of e-commerce usage as the reasons for its popularity.
“I think the increasing subsidy in one platform will not change our strategy,” Thompson said, “We’re focused on making OVO available where our customers need it most.”