The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021

2017-08-02
Price :
Published : Aug-2017
No. of Pages : 61

The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021

Summary

Cash was the predominant payment instrument during the review period (2012-16), especially among the rural population, with cash accounting for 98.6% of the total volume of payments in 2016. This was primarily due to low awareness of electronic payments, a high unbanked population, and limited access to banking infrastructure. As the government and banks have taken initiatives to bring the unbanked population into the formal banking system, payment cards have gradually become more accepted. Payment card use consequently grew during the review-period at a CAGR of 13.9% in terms of volume of transactions.

Pay-later card market in Indonesia is still in the developmental phase, with penetration of only 6.8 per 100 individuals in 2016. Strict government regulation with regard to credit card eligibility remains one of the major reasons for the low penetration. Mounting card debt among consumers forced the central bank to introduce a regulation, effective since January 2015, according to which individuals with an annual income of less than $222 (IDR3m) are now eligible for just one credit card, while individuals with an annual income between $222 (IDR3m) and $740 (IDR10m) are eligible to possess credit cards from two issuers only.

Indonesian e-commerce market rose from $1.2bn (IDR16.6tn) in 2012 to $7.6bn (IDR102.9tn) in 2016. Factors affecting the growth of ecommerce include a growing young population, the increasing presence of online retailers, a broader range of payment methods, and rising customer confidence in e-commerce transactions. Growth has further been supported by strong investments from the private sector.

Traditional payment methods such as credit transfers and cards remain the preferred mode of e-commerce payments in Indonesia, collectively accounting for 66.9% of the total e-commerce transaction value in 2016. Alternative payments such as digital and mobile wallets and carrier billing are also gradually gaining prominence in Indonesia, accounting for 6.8% of the total transaction value in 2016. This is an increase from 3.1% in 2012.

The report “The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021” provides detailed analysis of market trends in the Indonesian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cash, cheques, and payment cards during the review-period (2012-16).

In particular, this report provides the following analysis –
– Current and forecast values for each market in the Indonesian cards and payments industry, including debit, credit and charge cards.
– Detailed insights into payment instruments including cash, cheques, and payment cards. It also, includes an overview of the country’s key alternative payment instruments.
– E-commerce market analysis and payment methods.
– Analysis of various market drivers and regulations governing the Indonesian cards and payments industry.
– Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards.

Companies mentioned in this report: Bank Rakyat Indonesia, Bank Negara Indonesia, Bank Central Asia, Bank Mandiri, Bank Danamon, CIMB Niaga, Bank Mega, Visa, Mastercard, American Express, JCB.

Scope

– Bank Indonesia, the country’s central bank, is enhancing the security of payment systems in order to build customer confidence in payment cards. In this regard, the government has mandated the migration of all payment cards to EMV standards by December 31, 2021. Similarly, as of July 1, 2017 the central bank has mandated the adoption of six-digit PINs for debit and ATM cards, instead of four-digit PINs.
– Up until February 2016, the e-commerce market was in the government’s “Negative Investment” list – and thereby foreign investors were not allowed to invest in local companies or set up a business. To boost investment in the domestic e-commerce market, the government introduced a new foreign direct investment policy in February 2016 allowing 100% foreign ownership of e-commerce companies for investments over $7.4m (IDR100bn), while for investments between $740,000 (IDR10bn) and $7.4m (IDR100bn), foreign ownership was capped at 49%. However, the former regulation was later revised in May 2016 to limit foreign ownership up to 49% in e-commerce companies.
– Consumers in Indonesia are gradually adopting contactless payments. Consequently, Visa launched its contactless service Visa payWave in Indonesia in September 2016. This service enables Visa card holders to make contactless transactions without a PIN for transactions below $74.0 (IDR1m). Following this, Bank CIMB Niaga, Bank Tabungan Pensiunan Negara, UOB Indonesia, and Bank Mandiri adopted this technology.

Reasons to buy

– Make strategic business decisions, using top-level historic and forecast market data, related to the Indonesian cards and payments industry and each market within it.
– Understand the key market trends and growth opportunities in the Indonesian cards and payments industry.
– Assess the competitive dynamics in the Indonesian cards and payments industry.
– Gain insights into marketing strategies used for various card types in Indonesia.
– Gain insights into key regulations governing the Indonesian cards and payments industry.

Filed in: Banking & Finance
Publisher : GlobalData
More Reports
Title Price Buy Now

PESTLE Insights: Macroeconomic Outlook Report – Venezuela

PESTLE Insights: Macroeconomic Outlook Report - Venezuela Summary Zulia and the Capital region contribute 20.7% to the nation's total population and is home to major economic activities of the country. Mining, manufacturing and utilities activities contributed 30.7% to the gross value added (GVA) in 2016, followed by wholesale, retail and hotels (22.1%), and financial intermediation, real estate and business activities (11.5%). Scope - The IBVC index of the Caracas Stock Exchange recorded a significant growth in the past one year due to currency devaluation and very high level of inflation. The index rose from 60.5 on May 11, 2017 to 19,927 on May 11, 2018. - As per World Bank's logistics performance index (LPI), transport and logistic infrastructure in Venezuela deteriorated over the......
$500

PESTLE Insights: Macroeconomic Outlook Report – Croatia

PESTLE Insights: Macroeconomic Outlook Report - Croatia Summary Jadranska Hrvatska and Kontinentalna Hrvatska are the major regions of Croatia. Kontinentalna Hrvatska accounts for around 68% of the total GDP and 67% of the total population of Croatia. Financial intermediation, real estate and business activities contributed 24.3% to the gross value added (GVA) in 2017, followed by mining, manufacturing and utilities (20.7%), and wholesale, retail and hotels (17.6%). According to GlobalData estimates, the three sectors (nominal terms) are expected to grow by 3.9%, 3.3% and 5.1% respectively in 2018. Scope - As per World Bank's logistics performance index (LPI), transport and logistic infrastructure in Croatia has improved over the last two years with jump in rank from 55th in 2014 to 5......
$500

Wealth in China: HNW Investors 2018

Wealth in China: HNW Investors 2018 Summary "Wealth in China: HNW Investors 2018", report analyzes the investing preferences and portfolio allocation of Chinese HNW investors. It is based on our proprietary Global Wealth Managers Survey. Chinese HNW investors, who skew heavily towards entrepreneurial males across three industries, show strong demand for most forms of wealth advice and planning. A multi-service proposition underpinned by a proven ability to demonstrate returns will be key to tapping into demand. A uniquely large expat market, a burgeoning appetite for novel options such as robo-advice, and the upcoming monumental transfer of wealth between generations provides arguably the most significant growth opportunity for global wealth managers in the foreseeable future. Specific......
$3450

PESTLE Insights: Macroeconomic Outlook Report – Ukraine

PESTLE Insights: Macroeconomic Outlook Report - Ukraine Summary The Kiev and Dinpropetrovsk contributed 33.6% to the country's GDP and comprise of 14.5% of the Ukraine's population. Mining, manufacturing and utilities contributed 25.7% to the gross value added (GVA) in 2017, followed by wholesale, retail and hotels (17.4%) and transport, storage and communication (11.9%). In nominal terms, the three sectors are expected to grow by 6.5%, 10.3% and 12.7% respectively in 2018. Scope - The overall PFTS index exhibits an upward trend over the past year. As of May 4th, 2018 PFTS index stood at 471.97 as compared to 276.22 on May 4, 2017 - Lion's share of foreign investment inflow was from other European nations in 2017 - The government of Ukraine envisages to repair and build 1000 kms of ro......
$500

Payments Landscape in Peru: Opportunities and Risks to 2021

Payments Landscape in Peru: Opportunities and Risks to 2021 Summary GlobalData's 'Payments Landscape in Peru: Opportunities and Risks to 2021' report provides detailed analysis of market trends in the Peruvian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, direct debit, payment cards, and cheques during the review-period (2013-17). The report also analyzes various payment card markets operating in the industry, and provides detailed information on the number of cards in circulation, transaction values and volumes during the review-period and over the forecast-period (2017-21f). It also offers information on the country's competitive landscape, including the market shares of issuers and s......
$2750

Payments Landscape in Serbia: Opportunities and Risks to 2021

Payments Landscape in Serbia: Opportunities and Risks to 2021 Summary GlobalData's "Payments Landscape in Serbia: Opportunities and Risks to 2021", report provides detailed analysis of market trends in the Serbian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including payment cards, credit transfers, direct debit, and cheques during the review-period (2013-17). The report also analyzes various payment card markets operating in the industry, and provides detailed information on the number of cards in circulation, transaction values and volumes during the review-period and over the forecast-period (2017-21f). It also offers information on the country's competitive landscape, including the market shares of issuers a......
$2750

Alternative Payment Solution: Amazon Pay

Alternative Payment Solution: Amazon Pay Summary Amazon Pay was launched in 2007 as Pay with Amazon, before being rebranded as Amazon Pay. The solution enables users to pay for purchases on third-party partner merchant websites and apps using payment methods saved on the user's Amazon profile. In the US, Amazon Pay accepts credit and debit cards from major scheme providers including Visa, Mastercard, Discover, American Express, Diners Club, and JCB. Users can also make payments using their Amazon account balance. In India, Amazon offers the Amazon Pay Balance digital wallet, enabling customers to load funds and make purchases on Amazon.in and partner merchant websites and apps. In July 2017, Amazon Pay introduced a new payment service called Amazon Pay Places, which allows users to make......
$350

Fintech Profile: Neos

Fintech Profile: Neos Summary Neos is a mobile application offering Internet of Things (IoT)-powered home insurance in the UK. Scope The report provides information and insights into Neos, including - - Overview of the company and its product offering - Iinsight into its business operation, technology, revenue model, geographical presence, and target market - Information on funding, partnerships, and awards received - Biography of top management. Reasons to buy - Gain insights into Neos's business operations. - Gain insights into funding and partnerships. - Gain understanding about its target market and impact.......
$350

Fintech Profile: Kabbage

Fintech Profile: Kabbage Summary Kabbage is an online lending platform that offers a working capital line of credit (LOC) primarily to SMEs with an online presence. Scope The report provides information and insights into Kabbage, including - - Overview of the company and its product offering - Detailed insight into its business operation, technology, revenue model, geographical presence and target market - Information on funding, partnerships, and awards it received - Biography of top management. Reasons to buy - Gain insights into Kabbage's business operations. - Gain insights into funding and partnerships. - Gain understanding about its target market and impact.......
$350

HNW Targeting and Retention Strategies

HNW Targeting and Retention Strategies Summary "HNW Targeting and Retention Strategies", report analyzes and sizes key segments of the global HNW market, and provides detailed recommendations how to best target and service these individuals. The report also provides a detailed discussion on the effectiveness of different HNW client retention strategies. It is based on our proprietary Global Wealth Managers Survey. 48% of HNW individuals are professionals, making them the largest target market, closely followed by entrepreneurs at 46%. While considerably smaller in size, providers will also find HNW expats an attractive segment thanks to their more complex affairs resulting in a greater need for wealth management services. Despite the above segments' differing service requirements, we se......
$5250
We use cookies to deliver the best possible experience on our website.
By continuing to use this site, or closing this box, you consent to our use of cookies. To learn more, visit our Privacy Policy