For a priceless experience, renting a boat in Raja Ampat could cost around Rp6m in cash—not including the picnic lunch, the guide, or anything else in the trip. ATMs are quite scarce around the region, which means that the customer needs to carry cash and to prepare efficiently prior a trip. “Opening up and developing new places for tourism need digitally driven payment systems to ease transactions globally,” Director of Mastercard Indonesia Tommy Singgih said in explaining how technology drives Indonesia’s travel industry today. As a global player, Mastercard learns from countries—India and China, for example—that are also embarking on similar journeys as Indonesia to solve problems in the digital front.
Then, to find the best localised solution, a coordinated partnership between the stakeholders—the government, regulators, institutions, associations, and other partners—is important to find the best solution together. “The quest we embark on is to develop the technology in electronic payments so that people can transact everywhere,” Tommy said. “As a result, Indonesians will become global citizens in a ‘borderless’ world.” The challenge is that society needs to understand what “cashless” is and how it works, he further elaborated. Together with Mastercard’s partners, the company brings the technology information directly to the consumer to provide better and more seamless solutions online and offline.
“With the older generation, for example, they might not be interested if we present the ‘how’ in these digital workings,” Tommy said. “But, explain the ‘what’ and the ‘why’ and they might want to know.” Mastercard also partners up with idEA, the Indonesian E-Commerce Association, the Association of Indonesian Fintechs, and other institutions to hold workshops with SME owners about the importance of, and the ease in, using online payments. “Safety also needs to be conveyed and to be put at the forefront following a global standard so that people understand that cashless transactions are safe,” said Tommy. Citing a Mastercard case study, he showed that in the past three months, 34.4 per cent of buyers in Indonesia do not shop online for security reasons. Along the way, Tommy hopes that the numbers will decrease because Indonesia is seeing a development in safe online transactions—using debit cards, two-way verification, and many more. “Once consumers know that it’s safe, confidence will grow and will bring a positive response,” said Tommy.
To support all these advances in the world of financial technology, first, operators of telephone networks are expected to cover the needs of digital devices. “Whoever can provide a wide range of coverage will reap the most benefits,” said Tommy. Another necessary infrastructure development is on the receiving end. “Right now, Indonesia has around 1.2 million points of acceptance [networks], mostly concentrated in big cities,” he said. “Based on this number and the limited networks, electronic payment transactions will not grow.” To expand the network massively and affordably is the way to go, according to Tommy, so that banks could meet in the middle with their financial technologies. Starting from next year, Mastercard will slowly introduce QR-code payments followed by the contactless system that will make life easier in transacting from small to big payments—an effort to create a better economy in Indonesia.