The Indonesian Central Bank repeatedly warns citizens about cryptocurrencies and cautions to understand the risks, but the country’s regulations are currently fairly open towards digital currencies and blockchain technology.

An actual ban only exists for cryptocurrencies in payments, but exchange platforms and ownership of crypto-assets are not. Several state-owned banks and government entities are in fact working on blockchain-based applications, and the country’s financial regulator, OJK, has encouraged this, says Pandu Sastrowardoyo, co-founder of Bali-based blockchain consulting firm Blockchain Zoo.

She points out that to use blockchain technology. Indonesia’s geography – spread across a vast area and many islands – makes it a unique case for implementations of blockchain, explains Sastrowardoyo. Indonesia’s decentralization has led to more regional autonomy, but this came with fragmentation, less oversight, and potential for fraud. It’s quite easy to move to another island with a false identity in Indonesia, Sastrowardoyo says.

Most big banks in Indonesia have announced they’re looking into blockchain technology and are thinking about potential use cases. Blockchain Zoo consults many of them. While she can’t the names involved in individual projects, Sastrowardoyo shared some ongoing blockchain implementations in Indonesia which are likely to launch within the year.

Indonesia’s Blockchain Use Case #1 – Anti Fraud

Image Credit:Freepik

Indonesia has dozens of banks, including regional ones that operate only within a certain province. And not all of them have access to the country’s debt information system, only to bigger ones.

Thus, so-called loan stacking is a concern shared by many smaller banks – when a borrower takes out multiple loans and, in some cases, uses one to pay off another. Without consulting a centralized credit rating system, it becomes difficult to detect these cases.

Blockchain can solve this, Sastrowardoyo explains. A blockchain node is implemented between multiple banks. When people apply for a bank account, their customer information is translated into a unique hash that sits on the blockchain. If the same customer opens accounts elsewhere, the banks can see the hash, and they can flag the customer’s account as a potential for fraud.

Indonesia’s Blockchain Use Case #2 -Branchless Banking

A second application of blockchain that’s already being considered is for ATM machines. “Connectivity in Indonesia has lots of issues,” Sastrowardoyo. “If the connection to one important hub dies, the whole network goes down.”

If you implement a blockchain node on each of the ATMs, even if the main line gets disconnected, the ATMs would still be online and retains some basic functions.

Indonesia’s Blockchain Use Case #3 -Anti Corruption

There are plenty of possibilities for blockchain implementations in anti-corruption management, says Sastrowardoyo. Blockchain can help with increasing transparency, simplifying processes, and getting rid of middlemen. Put into more concrete terms, it often has to do with document management.

“The issue often occurs during the documents exchange,” Sastrowardoyo says. The process takes long, and there’s plenty of opportunity for human error and fraud.

Based on blockchain technology, it’s possible to construct a system that lets companies or different units within an organisation share documents in a secure way, without having the data leave local servers, Sastrowardoyo says. There’s a clear history of all document exchanges which reduces the possibility for fraud.

Indonesia’s Blockchain Use Case #4 -Central Bank Backed Cryptocurrency, Digital Rupiah

Sastrowardoyo confirms that there’s ongoing research looking into the creation of a Digital Rupiah, a cryptocurrency backed by the government. Rumors of this surfaced earlier this year, but the Central Bank later said the plans would not be rolled out anytime soon.

Sastrowardoyo says that what the government is considering is less of a real cryptocurrency, and more akin to an e-money system that runs on the blockchain.

Indonesia could join the short list of countries that already have, or are preparing to issue a state-run digital currency.

Separating the Hype from Real Blockchain Use Cases

These four application scenarios are all useful examples of how Indonesia is thinking about blockchain implementations. As a consultant, Sastrowardoyo has come across instances where companies force the implementation of blockchain, just so they can raise money through and ICO.

Especially when one company owns all the aspects of the process they plan to push onto the blockchain, the technology isn’t necessarily required because it could be solved with simpler tools.

Putting a marketplace that involve different stakeholders onto the blockchain makes much more sense, Sastrowardoyo. That’s what her consulting firm did for FidentiaX, a marketplace for insurance policies based in Singapore. The marketplace digitizes your insurance and you can sell them in bulk. There’s no need for a paper document transfer, which had slowed down the process of previous marketplaces significantly.

“These marketplaces already existed, but with the blockchain, it got much much better,” Sastrowardoyo says. “In my favorite ICOs, the technology is really a differentiator.”

Blockchain Zoo is based in Bali, Indonesia, and was co-founded by a group of entrepreneurs who’ve been part of the blockchain community from early on. The firm was instrumental to the formation of Indonesia’s Blockchain Association last month and works with banks, government entities, and private companies across Southeast Asia.

Featured Image via Freepik

United Overseas Bank Limited (UOB) and Pintec Technology Holdings Limited (PINTEC) announced the launch of their joint venture, Avatec.ai .

Avatec aims to help banks and finance companies to be more efficient and more accurate when assessing the credit quality of potential customers, including those who are new to credit. The digital solution can also be extended to companies in sectors such as e-commerce, retail, and travel that offer financial products such as point-of-sale financing.

27% in SEA are Bank account holder

According to KPMG, only 27 percent of Southeast Asia’s 600 million people hold a bank account. Within this segment, many people are still underserved when it comes to being able to access credit. These include young professionals at the beginning of their careers and small businesses.

Avatec provides companies offering financial products with an innovative next-generation credit assessment solution that analyses a broader set of digitized data beyond that which is traditionally used in evaluating personal or business credit applications.

Avatec’s credit assessment tool harnesses the power of artificial intelligence, machine learning, and anti-fraud algorithms to determine an applicant’s credit quality within seconds.

Mr Dennis Tan, Chief Executive Officer Designate, Avatec, said that the new company brings together the insights gleaned from UOB’s more than 80 years of serving consumers and businesses in Southeast Asia and PINTEC’s financial technology (FinTech) capabilities to help companies tap growth opportunities within the region.

“Avatec’s end-to-end intelligent digital credit assessment solution is not only useful to financial institutions, it will also enable companies in sectors such as e-commerce, telecommunications, retail and travel to offer financial products such as point-of-sale financing, and personal and business loans quickly and efficiently. By making financial products more inclusive, these companies will be able to connect with a larger base of customers in the region,”

Mr Tan said.

Avatec is incorporated as a subsidiary company of UOB, with UOB owning the majority stake (60 per cent) and PINTEC the minority stake (40 per cent). The Bank will invest up to S$12 million in Avatec over the next two years.

Dr Dennis Khoo, Head of Regional Digital Bank and Strategic Initiatives, UOB, said the Bank’s strategic investment in Avatec is the first in a series of groundbreaking digital initiatives that will be launched in 2018.

Dennis Khoo

“Robust credit risk management is fundamental to the strength of the financial system. Avatec’s next-generation digital solution will enhance the performance of our business through the underwriting of better quality loans to more customers who previously would not have had access to credit.

The customer experience will also be simpler and faster as customers will know almost instantly if their online application for a loan with UOB is approved.While UOB will benefit from Avatec’s unique credit assessment capability and advanced analytics, we expect other companies too will use the solution to seize new business opportunities and to spur more financial inclusion across the region,”

Dr Khoo said.

Mr William Wei, founder and CEO of PINTEC said that the partnership with UOB will help the financial technology firm to expand further into Southeast Asia.

William Wei

“There is a growing demand for financial technology (FinTech) solutions in Southeast Asia as companies explore using technology to capture growth opportunities in the digital economy.

As a leading independent technology platform enabling financial services in China, we are well-positioned to meet the needs of companies who want to use technology to serve more customers and to serve them better.

Our collaboration with UOB, a leading bank in the region, will assist us with the expansion of our FinTech solutions into Southeast Asia. This is the next phase of our strategy in the region, which is also in line with China’s Belt and Road Initiative,”

Mr Wei said.

Avatec will launch its next-generation digital credit assessment solution in Indonesia, followed by other Southeast Asian markets within the next two years.

Featured image via UOB Facebook page

The latest Global Financial Inclusion Index (“Findex”) database released today by the World Bank finds that Indonesia’s financial inclusion has made the most progress, across East Asia and the Pacific, in bringing its citizens into the formal financial system in the past three years, particularly women.

Around half of the adults in Indonesia now own a bank account, reflecting a true turning point in the country’s journey to boost financial inclusion. This also registers a marked improvement from its 36 percentage of account ownership in 2014 and 20 percent in 2011.

Between 2014 and 2017, Indonesia also saw the biggest account ownership increase of any emerging economy in the East Asia and Pacific region.

Indonesia also boasts a strong use of accounts for saving, registering 10 percentage points higher than the comparable world average. 42 percent of account owners save at a formal financial institution such as a bank or microfinance institution.

Mr. Darmin Nasution, Coordinating Minister for Economic Affairs and Daily Chair of the National Council of Financial Inclusion, the Republic of Indonesia, commented:

Darmin Nasution

“The inclusion of unbanked Indonesians has been a top priority for our country in recent years, and we are emboldened by the global recognition of our progress, raising the bar for our entire region.

We are especially proud of our strides in closing the gender gap—today, women are more likely than men to have a bank account in Indonesia. We owe our success in large part to our transition to digital payments and hope that more countries will look to digitization to help citizens escape poverty, reduce social inequality, and help government be more efficient.”

Globally, 69 percent of adults have a bank account. Bank account ownership gives people access to an important financial tool, providing a safe way to store money and build savings for the future. They also make it easier to pay bills, access credit, make purchases, and send or receive remittances.

Indonesia’s Financial Inclusion Progress in Gender Equality

In Indonesia, women are five percentage points more likely than men to have an account. 51 percent of women have an account, against 46 percent of men. However, women and men are equally likely to have an active account.

The digital opportunity to help Indonesia’s unbanked

With approximately 60 million unbanked adults in Indonesia using mobile phones today, there is a massive opportunity for a greater penetration of mobile payments and transactions in Indonesia.

In Indonesia, 33 percent of the unbanked cite distance as a key reason for not having an account and 69 percent of this population segment have their own mobile phone. Among account owners within the local population, 71 percent make or receive digital payments, up from 62 percent in 2014. Millions of unbanked Indonesian adults work in the private sector and get paid in cash.

As close to 20 million unbanked private wage earners in the country have a mobile phone, it is estimated that digitizing private sector wage payments could reduce its national share of unbanked adults by up to 29 percent.

Featured image via Pixabay

Indonesia, the largest economy in South East Asia, with an estimated population of over 260 million people, the majority of which are under the age of 35 and growing mobile phone and Internet penetration rates, Indonesia is a treasure trove of untapped fintech opportunities.

Fintech companies looking to expand in South East Asia would be remiss if they were to overlook the Fintech Indonesia scene as a potential market. With that in mind we hope to help you navigate the Indonesian landscape with our latest edition of the Fintech Indonesia report 2018

Fintech Indonesia Report -Overview of the Indonesian Economy

Download the full Fintech Indonesia Report 2018 Here

With interventions by the regulators and increased boom of fintech startups addressing financial inclusion issues, the World Bank has lauded Indonesia as the country in East Asia with the most improvement in bringing its citizens into the formal financial system in the past three years, particularly women.

Fintech Indonesia Report – Steady Growth For Fintech in Indonesia

The market has also shown a considerable amount growth with the annual growth rate of 16.3% with the total investment into fintech companies standing at USD 176.75 Million in 2017 alone.

Download the full Fintech Indonesia Report 2018 Here

Fintech Indonesia Report -Regulatory Environment for Fintech in Indonesia

The fintech indonesia scene is primarily regulated by two main entities; namely Bank Indonesia and Otoritas Jasa Keuangan. While Bank Indonesia is an entity that is primary function is geared towards monetary policies it has taken matters relating to payments under its regulatory scope, arguing that it has a big direct impact on the monetary stability.

Whereas OJK functions as a supervisory arm of the government to regulate the financial services sector, in particular within the fintech ecosystem OJK oversees P2P Lending, Crowdfunding, Digital Banking, Insurtech, Fintech in Capital Markets, Online Financing, data security and of course consumer protection.

Download the full Fintech Indonesia Report 2018 Here

Initiatives to prop up the fintech sector in Indonesia by the regulators include the setting up of the Fintech Office, the launch of the National Payment Gateway, establishment of the Fintech Regulatory Sandbox, regulation for P2p lending services. To date there are already 40 P2p lending service registered with OJK.

Download the full Fintech Indonesia Report 2018 Here

Fintech Indonesia Report – Map of Fintech Companies in Indonesia

Similar to it’s other Southeast Asian counterparts like Singapore and Malaysia, payments and lending dominates a large portion of the fintech ecosystem.

Download the full Fintech Indonesia Report 2018 Here

The growth within the Indonesian fintech space is remarkable, in our last report that was produced in 2016, we’ve identified a total of 50 fintech companies operating in Indonesia, contrasting that with our current findings we identified a total of 167 fintech companies operating in Indonesia.

Download the full Fintech Indonesia Report 2018 Here

Cryptocurrencies and blockchain technology have been all the rage in the past years with startups in the space raising more than US$1.3 billion in venture capital so far in 2018. The amount has already surpassed the total raised in 2017 and excludes initial coin offerings (ICOs), which raised a staggering US$6.3 billion in 2018, as of April.

Although 2017 was the year of cryptocurrency, 2018 looks to become the year of blockchain technology with greater adoption from traditional financial institutions, firms and governments, and more implementation of the technology in industry outside of finance, including healthcare, business management, communication, and more.

Southeast Asia too has seen increasing blockchain activity and development. In Indonesia, several startups and companies have been established in the past year to tap into the thriving industry. Although relative small, the Indonesian blockchain and cryptocurrency space is growing steadily.

The Indonesia Blockchain Association (Asosiasi Blockchain Indonesia) was launched in March 2018 to formally represent the industry and help accelerate the growth of blockchain in Indonesia.

Here are six interesting blockchain and cryptocurrency companies from Indonesia:

Pundi X

Pundi X aims to bring cryptocurrency to the masses by building and providing solutions to allow users to easily buy, sell and use cryptocurrency anywhere and anytime.

Pundi X is building the world’s largest decentralized, offline cryptocurrency network: decentralized, because the ecosystem and transaction records live on the blockchain, and offline, because the entry point is via point-of-sale (PoS) devices installed in physical outlets.

Pundi XPOS is the company’s PoS solution that supports payments from both cryptocurrency wallets and traditional mobile wallets, including Alipay.

Indodax

Indodax, formerly Bitcoin Indonesia, is a cryptocurrency exchange headquartered in Bali that launched in 2013. It is the largest cryptocurrency exchange in Indonesia and as of 2018 more than 1 million members were registered.

Indodax offers its services worldwide but accepts deposits in Indonesian rupiah only. Cryptocurrencies supported include Bitcoin, Dash, Ethereum, Waves, Nem and Litecoin.

Tokocrypto

Founded in 2017 and based in Jakarta, Tokocrypto aims to be Southeast Asia’s leading cryptocurrency exchange platform by providing people with a fast, safe and secure way to buy and sell Bitcoin and other cryptocurrencies.

The platform allows users to trade cryptocurrencies online and currently only support the sale of Bitcoin and Ethereum. Later, it plans to add support for Ripple, Litecoin, Cardano, NEO, and Swipe.

Triv

Triv is a digital wallet that allows users to shop online, top up their phones and send money to their friends and families. The online platform supports cryptocurrencies including Bitcoin and Ethereum.

On Triv, users can easily pay and get paid, as well as withdraw their funds in real-time from and to 100 banks in Indonesia.

Blocktech Indonesia

Based in greater Jakarta, Blocktech Indonesia provides funding and infrastructure to blockchain startups. The company was founded in 2017 and has so far invested in the likes of cryptocurrency mining startup Hash Point, blockchain-focused co-working spaces Blockchain Space, blockchain startup Eximchain, and initial coin offering focused startup Standard Alpha.

Indonesian Blockchain Network

The Indonesian Blockchain Network is an organization that focuses on promoting and creating awareness of blockchain technology. The Indonesian blockchain advocacy group aims to accommodate and facilitate the growth of blockchain and cryptocurrency technology.

The Indonesian Blockchain Network organizes blockchain and cryptocurrency-related meetups as well as technical workshops, and administers online blockchain related content.

Pundi X has announced its new chief legal counsel, David Ben Kay, a lawyer to leading Asian technology companies and blockchain startups with over three decades of experience.

David is a specialist in international intellectual property and investment law and had a long career working in China, beginning with the leading international law firm Dentons.

In the following 30 years, David helped establish more than 250 companies in that country, including Microsoft’s China subsidiary which he helped set up in the early 1990s. David later joined Microsoft China as general counsel in 2003 and led the company’s work on intellectual property, anti-piracy, government relations and corporate social responsibility.

Expertise in legal issues of Blockchain technology

In recent years, he has advised over fifty start-up and early-phase technology companies and developed an expertise in legal issues involving blockchain technology.

David will assist Pundi X in navigating international legal and regulatory issues as it targets a global rollout of 100,000 XPOS devices over the next three years.

David said,

David Ben Kay

“I’m really excited about joining the Pundi X team and working with them to achieve their vision of mass inclusion: enabling consumers and merchants everywhere to use and exchange cryptocurrencies with ease. I’m also hoping we can have a positive impact on the whole ecosystem through working with industry associations and government regulatory bodies to take a rational and encouraging approach to the blockchain and cryptocurrencies.”

Passionate about Pundi X

“I’ve worked as an advisor to a number of blockchain-based startups, but it was Pundi X’s mission and the clarity of vision and passion of the Pundi X team that made me want to join them and contribute whatever I can to their success.”

David was an advisor and later a board member for the Ethereum Foundation, the Swiss non-profit dedicated to promoting the revolutionary blockchain-based distribution platform and smart-contract-enabled cryptocurrency of the same name. He joined Ethereum in 2015 and advised the foundation through a period of critical growth in 2016.

Zac Cheah ,CEO and co-founder said,

Zac Cheah

“Pundi X has already fielded pre-orders for our latest XPOS model from Switzerland, Japan, Korea and Singapore and expanded its presence across Southeast and East Asia, Latin America and Europe. Having an in-house counsel with David’s depth of experience and knowledge of emerging blockchain regulations will be essential to ensuring we successfully achieve a global rollout to 100-million consumers in six continents.”

Pundi X was founded with the mission of making buying and selling cryptocurrencies as easy as buying bottled water. Its blockchain-based point-of-sales solution includes hardware and software that allows users in real retail stores to buy and sell goods using cryptocurrencies.

The company has completed its public token sale on January 21 and reached its hard cap of US 35 million dollars in less than 90 minutes.

Orders have been placed for more than 25,000 XPOS devices worldwide and there is currently a two-month backlog.

Pundi’s market capitalisation exceeds $240-million, according to CoinMarketCap.com.

Featured image via Pixabay

The Financial Services Authority (OJK) will be launching a fintech centre sometime in August as part of their efforts to grow the fintech ecosystem in Indonesia, as well as drive innovations in the field.

Indonesia’s Swelling Fintech Sector

OJK’s head of digital financial innovations and microfinancing development Triyono told reporters that fintech in Indonesia is growing rapidly. The statements made by Triyono matches our observations of growth in the sector these past few years.

As the largest economy in South East Asia, many of its neighbours like Singapore and Malaysia are eyeing to expand to the Indonesian market. A center a such will likely serve Indonesia well to attract more foreign fintech companies to set up their base in Indonesia.

Fintech Hub to Support Growth of Indonesia Fintech Scene

Triyono Gani

He added that he arrival of the centre will cultivate fintech growth in Indonesia, and serve as a location for fintech companies to be able to further develop their businesses.

Additionally, OJK will also be looking at establishing fintech courses in higher learning institutions locally to churn out the much-needed talent for this space.

According to Detik Finance, the fintech centre will be equipped with facilities like a big screen, a café with a design that is inspired by coworking spaces, big tables, and etc. The centre will also display the names of fintech businesses that have been registered under OJK.

Featured Image Credit: The Diary Of A Hotel Addict on Flickr 

Jakarta based FinAccel has raised a USD30 million Series B equity investment round led by Square Peg Capital, with participation from new investors MDI Ventures and Atami Capital, and from existing investors Jungle Ventures, Openspace Ventures, GMO Venture Partners, Alpha JWC Ventures and 500 Startups.

In just over two years since launch, Kredivo has become the most widely adopted alternative checkout and digital credit payment method across Indonesian e-commerce merchants. No other company is live on nearly all of the top ten merchants, including Tokopedia, Shopee, Bukalapak and Lazada, and more than 200 overall.

Kredivo has credit scored nearly two million Indonesian consumers and helped e-commerce merchants increase sales and customer retention significantly. Kredivo’s consumers are incredibly valuable and loyal, with 80% of its transactions in any month coming from repeat customers.

Tushar Roy, Partner at Square Peg Capital said,

Tushar Roy

“Kredivo is an institutional-grade business in all aspects: it has automated some of the most complex elements of lending, it is trusted by the best merchants in Indonesia, its risk metrics are bank-grade, and it is already attracting institutional debt.

 

More importantly, it is helmed by high integrity, experienced founders, who are motivated to solve massive pain points for Indonesian merchants and consumers, and in doing so drive the growth of the overall economy. We are very excited to support the team’s vision of enabling better financial services for Indonesian and SEA millennials.”

Nicko Widjaja, CEO of MDI Ventures, a part of Telkom Indonesia, added,

Nicko Widjaja

“Kredivo is the first lending-tech company in our portfolio. It is the leader in Indonesia, with the most advanced credit scoring technology that we’ve seen so far in this market.

 

We also like that Kredivo offers fair, transparent rates without any hidden fees or gimmicks. With our participation, we hope to push more into under-served market segments while leveraging Kredivo’s key strengths around technology automation and fair pricing.”

Akshay Garg, CEO of FinAccel said,

Akshay Garg

“We are humbled to have such a high-quality set of investors support our vision of enabling faster, frictionless e-commerce payments and providing safe, low-cost financing in a transparent and efficient manner. While SEA is one of the largest and most dynamic economies in the world today, financial services in this region lag behind their peer group.

 

We intend to use the new funds to build out new product lines, expand geographically and hire more talent with the aim of becoming the preferred digital credit card for SEA millennials.”

Featured Image via Pixabay

Indonesia’s cashless experiments in Jakarta has yielded interesting results. By 2017, many of the industry’s observers were already discussing the possibility of Indonesia transforming into a cashless nation, and this impression has held on until this year.

And transportation is seemingly leading the fold towards cashless.

In certain areas, using public transport can all be done with e-money. Not to mention, there is a sharp increase in cashless transactions for homegrown Go-Jek and Grab, who are either paving the way for cashless in Indonesia, or simply reaping its benefits. Since both companies offer food delivery as well, the movement towards cashless is a promising one.

In fact, Indonesia is in the midst of developing Jakarta’s MRT and LRT systems which will be fully cashless, as well as the One Card One Trip (OK OTrip) programme which would allow you to switch between busses, minivans and trains with just one card, and one flat rate.

The cashless bug has bit beyond just Jakarta. Some examples, like the Mandiri’s e-money and e-cash, uses it’s card and wallet respectively to reach out to the unbanked populations of Indonesia with the goal of serving as a replacement to normal bank accounts.

While there is a lot of support, both from the higher powers, telcos, banks and fintech startups, a question remains: is the Indonesian public taken with the concept of cashless?

Based on a little bit of digging, while things are promising, we have some concerns.

Promising Still Remains a Promise

Go-Jek and Grab reported a sharp increase in cashless adoption on their rides, but World Bank reports that only 27% of 2017’s transactions comprised of digital payments. Meanwhile, debit card ownership has only reached 31% of the population in 2017.

Credit cards do not fare any better either.

Curiously though, 61% of Indonesia’s consumers prefer cashless compared to cash, as recorded by Statistica.

Perhaps the discrepancy can be boiled down to Indonesia’s merchants who are not yet on board with the cashless trend. While cashless can be more convenient for the consumers, admittedly this does require a bit of setup from Indonesia’s vendors. Merchants, especially smaller merchants, can find it difficult to apply for EDC (electronic draft capture) which for the longest time, is the only cashless option available for Indonesia to adopt.

So while the many transportation-based initiatives have converted the public, it will remain to be seen if merchants this year are coming aboard as well. But efforts are underway. For one thing, Indonesia’s Cashlez developed a mobile POS (point of sales) system which can be installed quite quickly, and accepts most bank cards, including debit, Visa, and Mastercard.

The card reader uses an app on the merchant’s phone which can be installed. It accepts most cards from different banks, including debit, Visa, and Mastercard.

Like China, Indonesia’s Cashless Saviour May Be Online Shopping

Screenshot of Tokopedia at the time of writing

With Indonesia’s e-commerce sales expected to increase by 91% from 2018 to 2022, Indonesia’s new breath in cashless may actually boil down to online shopping.

The availability of relatively niche items, as well as the cheaper price point of e-commerce products could serve as another great educator for cashless in Malaysia. When it comes to popular websites such as Tokopedia, the merchants would automatically be on board the cashless train without them needing to port into a card reader.

After all, it was the e-commerce boom in China, the cashless dream of many nations, that partly led to the natural e-wallet growth. It’s no coincidence that Alipay is one of the top guns in the nation, and affiliated with China’s e-commerce goliath Alibaba.

Seeing the success of e-commerce in neighbouring nations like Malaysia and Singapore, it can be surmised that Indonesia would take to online shopping as well.

For Indonesia to compete on a global scale, it is crucial for the nation to adopt the ever popular cashless trend that the world’s fintech has moved towards. This was perhaps why Indonesia leads in financial inclusion, and saw a big increase in adults with bank accounts from 36% in 2014, to around half in 2018.

Between 2014 and 2017, Indonesia also saw the biggest account ownership increase of any emerging economy in the East Asia and Pacific region.

The problem though, is that many Indonesians consider proximity to banks a big hurdle.

Meanwhile, 69% of this segment owns a mobile phone—a huge opportunity for a non-bank digital money storage solution to swoop in.

This is perhaps why the Indonesian e-wallet scene has been described as saturated . The problem though, as we’ve outlined for the Malaysian markets, is that too many options may actually impede the public’s adoption, especially if it’s a new technology the ecosystem isn’t familiar with yet.

At the very least, we know that there is a majority of Indonesians who are supportive of the government’s vision towards a cashless society. Once the nation does find a system that works, that will be the expected cashless boom that has been the prediction of many observers, and finally put Indonesia on a global fintech scale.

Featured Image Credit: Yosomono on flickr

Indonesia’s tech scene has finally hit its stride, and the industry is now rife with startups and tech businesses that aim to solve problems unique to the Indonesian ecosystem.

One area of tech of high interest in Indonesia is blockchain, the technology underlying cryptocurrencies that have taken the world by storm in 2017. The technology is the up and coming tech trend of 2018 it seems, and Indonesia already has a strong hand in this pie, starting with startups like those featured here.

Within the past few months, there have been huge industry-changing developments in Indonesia’s blockchain that could, with proper cultivation, bring blockchain development into a more prominent, streamlined and potentially disruptive stage in Indonesia.

1. Bank Negara Indonesia Now Use Blockchain for Trade Finance and Remittance

Singing of an MoU

Those in the know have said for years that blockchain can be used to streamline many legacy systems prevalent in finance, with immutability as a key point of interest for any processes that involve more than one organisation. Taking these lessons to heart, Bank Negara Indonesia (BNI) has decided to incorporate blockchain technology for trade finance and remittance products.

The central bank has already taken their leap in May this year with the signing of a Memorandum of Understanding (MoU) between the Treasury and International Director, Rizal Budidarmo and the CEO of PT Adamobile Solutions Networks, Adam Suhermanin.

The central bank will be the first in the nation to apply blockchain technology.

Rico Rizal Budidarmo

Rico Rizal Budidarmo, MD in BNI, said that:

“The use of blockchain in trade finance transaction can provide easiness in the form of document access and validation that can be done in  real time through an integrated system among its members.”

 

“While for remittance transactions, among them is for real time and sage data exchange as the data has been encrypted to all of the blockchain members.”

2. Indonesia Launches Its Very Own Blockchain Hub

Earlier this month, an Indonesia Blockchain Hub was just launched as a dedicated space to help the promotion and development of blockchain technology.

The Indonesia Blockchain Hub’s goal is to bring together the different Indonesian Blockchain communities, to drive innovation, and to provide education on blockchain technology. It is supported by HARA, a blockchain for social impact project, the Indonesian Blockchain Association (ABI) and the Indonesian Chamber of Commerce and Industry and the government agency BEKRAF.

Yos Ginting

Yos Ginting, member of the supervisory board of the ABI said,

“We believe that the set-up of a place like Indonesia Blockchain Hub will accelerate the exchange of information. It can be used to [help] make Indonesia a country that will reap the benefits [of blockchain technology] as early as possible.”

“I think this is the time where our agency can help to support and to foster the blockchain ecosystem, and most importantly we will become the government agency that will echo the importance of the blockchain ecosystem to the other government institutions as well.”

 

Regi Wahyu

Regi Wahyu, CEO of HARA said,

“This is a historical moment for Indonesia. This shows that Indonesia is ready for blockchain technology. The Indonesia Blockchain Hub will have a huge effect on how the blockchain ecosystem will grow in Indonesia.”

Having a centralised location for blockhain startups and experts to congregate can be a great way to bring the industry’s brightest minds together, particularly to create solutions that are unique to the Indonesian people.

Both developments mark important stages for Indonesia’s blockchain—BNI taking such a hard stance on blockchain could be the key motivator Indonesia’s banks need in order to take blockchain development seriously.

Meanwhile, the launch of the Indonesia Blockchain Hub could help cultivate important blockchain discussions unique to the nation, and most importantly, streamline the whole operation into one focused vision.

Featured image via Pixabay

Singaporean based SmartPesa recently entered into a partnership with Indonesian banking vendor PT Visionet Data Internasional to jointly launch Mobey.

Mobey is described to be mPOS and agent banking solution designed with the intention to tackle challenges of limited infrastructure and payment options faced by banks in in Indonesia .

Prior to its expansion to Indonesia SmartPesa has also entered the Malaysian market with Tune Insurance and Ambank.

“SmartPesa is continually looking to drive financial inclusion to better lives in emerging markets. This partnership with Visionet will help solve real-world practical problems by introducing our innovative technologies to the grassroots, and bringing much-needed payment solutions to Indonesia,” said  Co-Founder & Chief Executive Officer of SmartPesa.

Featured Image Credit: SmartPesa

Go-Jek, Indonesia’s unicorn darling just announced that they will be partnering with peer-to-peer (P2P) lending firms Findaya, Dana Cita and Aktivaku.to which marks them as yet another ride-hailing giant dabbling in financial services.

The company’s decision to join the lending scene is a strategic one for the Indonesian market, as the nation is fertile ground thanks to huge swaths of unbanked communities. The government has made huge strides towards financial inclusion in the nation, but this was a relatively recent development.

Back in 2011, only 20% of Indonesian adults had a bank account, which precluded them from being able to access financial services due to a lack of financial history with banks—even among those who had the means to pay the loans back. Meanwhile, Indonesians in poverty are unable to secure loans to carry them out of their situation and are stuck in a cycle of poverty.

This was the environment that cultivated the P2P businesses in Indonesia, and helped them flourish. Today, alternative lending amounts to US$27.5 million in 2018.

The lending platform Modalku proves the value in this scene as they record the largest funding round raised by a P2P lending platform in Southeast Asia, with US$ 25 Million raised led by Softbank Ventures.

The Indonesian Landscape

A full breakdown can be found in our Indonesian Fintech Report.

With a real need and a landscape rife with opportunities, we counted at least 40 players specifically dabbling in the P2P lending space. While there are a plethora of fraudulent players complicating the fray, the services are nevertheless seen in a positive light by the Indonesian people.

The popularity of P2P lending platforms lie in its efficiency—quite a few of these platforms are able to do credit screening more quickly than banks can, and offers lower interest as well. Another key appeal in P2P lending is the ability to receive even small loans. Companies like KoinWorks comes to mind, allowing loans at a minimum of 100,000 rupiahs.

KoinWorks management.

There is often no need for collateral, and documents can be submitted ay time, instead of being subject to a bank’s office hours.

It is worth noting that analysts have warned that a more accurate credit assessment process should be developed if the industry is to progress, and it does seem likely that companies without this infrastructure will develop it as the scene matures.

The P2P lending scene is also attractive to lenders who are able to collect on interests incurred and grow their own wealth as the majority of lending platforms shoulder the risk.

Image Credit: Convergence Ventures

Regulations

OJK officially launching a financial services innovation centre (Image Credit: OJK)

P2P lending services hit the nation by storm only 2 years ago, which marks the scene as a very nascent one. As such, the regulations on P2P lending are still relatively lax.

That being said, both the sheer volume and popularity of these platforms have driven OJK, the Financial Services Authority of Indonesia to establish a regulatory sandbox specifically for online lending services—which in a way, heralds the P2P lending industry in Indonesia as a cut beyond any other fintech.

After all, it is a win-win situation for the government. Many of those who borrow from these platforms use the seed money to run micro and SME businesses, which helps drive the economy.

OJK issued regulations that in part, requires P2P lending providers to apply for a permit. The regulator also stipulated that startups need to have at least $200,000 in capital to be approved for an operating license, and can only issue a maximum loan of $150,000.

Allowing for potential users to check for a licence could help cut through the scammy lending firms operating in Indonesia, and there are a lot of them. OJK has discovered at least 227 illegal online lending startups.

But this regulation should only be the beginning of OJK’s role into P2P lending, and does not provide a holistic solution to both cultivate and regulate the scene yet. Perhaps even the regulators themselves are purposefully being permissive to P2P lending startups to help them flourish.

What Will Happen When Indonesians Are Already Financially Included?

The growth of Indonesian loans (Image Credit: Trading Economics)

In Indonesia’s efforts to match up with the cashless trend gripping the word, the country’s financial inclusion grows rapidly—in fact, World Bank characterises Indonesia as the nation that makes the most progress in helping its unbanked populations among East Asia and the Pacific.

The 20% of banked adults in 2011 grew to 49% in 2017, and while the number is still lower than the global average, the nation is catching up fast.

For now, P2P lending businesses serve as a crucial stopgap that enables Indonesians to access lending while the government ramps up efforts to grow financial inclusion, but we can’t help wondering—once more adults develop a financial history through banking, will that spell the end for P2P lending?

We think that this will all depend on two important factors:

• Do P2P lending firms offer more value beyond just borrowing money?
• Can banks quickly innovate and upgrade their lending infrastructure to outpace fintech P2P lending firms?

Lending is still considered a fresh-faced sub-industry in the nation, which means that they are more agile and able to rapidly change their business model or strike strategic partnerships at the drop of a hat.

But things may not shake out into an either-or situation either.

Joining Forces with Banks

Andi Taufan Garuda Putra, founder of Amartha (Image Credit: Amartha)

Fintech trends across the globe showcase previously agile and competitive fintech organisations eventually joining forces with the very banks they once attempted to disrupt. This usually happens when banks, attempting to innovate, realise that it is better to pull in already mature service instead of having to start their own inferior version from scratch. Meanwhile, fintech firms are enticed by a large pool of funds to dip into, and the opportunity to access corporate-level business opportunities.

Amartha, a P2P lending firm which started out as a group lending institution, already cooperates with the Central Bank of Indonesia (BNI) and could be one of the trendsetters paving the way for coalescence.

Or Indonesia Could Develop Its Own Lending Giant

Reynold Wijaya of Modalku (Image Credit: The Jakarta Post)

Many situations that lead to convergence of banks and fintech happen in nations where banks hold a significant presence over the populace. So considering the relatively low banked populations, and a newly-formed clientele that lacks financial history, it’s possible that fintech services could outpace banks in the lending department.

China’s entire financial institution changed gears when e-wallets gained dominance in the nation, raising companies like Tencent and Alibaba into giants and in a perfect position to take advantage of the Belt and Silk Road Initative rolled out by the Chinese government.

In a similar vein, there is also the possibility of an Indonesian company rising up to become a fintech giant in Indonesia.

To this end, if we go by the precedent set by China, then Go-Jek is in a decent position to fill this role in Indonesia. Both Alibaba and WeChat started out in e-commerce and instant messaging respectively, before diversifying into wallets and striking gold.

Since lending is a different beast compared to e-cash though, this doesn’t preclude existing players like the highly-funded Modalku to rise to dominance regardless of their lack of diversification in services, simply due to experience and an existing clientele.

Featured Image via Go-Jek

Astra International, through a subsidiary and China-based lending company WeLab has just banded together to launch a joint venture in Indonesia focused on the nascent and still lucrative lending scene.

Named AWDA (PT Astra WeLab Digital Arta), the joint venture has announced their plans to launch a mobile lending app Maucash by the end of September. To get the ball rolling, Maucash has been registered with the Financial Services Authority (OJK), and intends to use big data analytics to also generate insights to assess the creditworthiness of their borrowers.

Beyond the new application though, AWDA seems to have plans towards providing other financial products and solutions, with a focus on big data technology, though no concrete plans have been announced.

The venture made the decision to launch Maucash due to accelerating smartphone use in Indonesia, which grew from 24.7 million users in 2013 to a staggering 103 million users as of 2018, as well as a growing internet connectivity.

Suparno Djasmin

“We look forward to broadening our digital offerings to further promote financial inclusion in Indonesia,” said Suparno Djasmin, Director of Astra.

“We constantly look to partner with industry leaders and we believe that WeLab is at the forefront of fintech innovation.”

Simon Loong, Founder and CEO at WeLab, stated:

Simon Loong

“WeLab is very excited to expand our fast-growing business beyond China and Hong Kong to our third market, Indonesia.”

Astra International is a well-known holding company in Indonesia that, through AWDA, will be dipping their toes into the fintech field. Despite having a diversified portfolio, the company is better known and makes most of its value from providing automobile and motorcycle products, which makes up almost half of the company’s total net profit. The group has partnered with Toyota, Daihatsu, Isuzu and Peugeot for this.

Meanwhile, WeLab is a Hong Kong-based fintech unicorn backed by the likes of TOM Group and Alibaba Group, which already operates a mobile lending platform in its hometown. The partnership will serve as a localised expansion of the company’s existing services.

Featured image via Astra

Homegrown fintech player MC Payment held a soft launch for Instapay, a new mobile B2C payment platform targeting Indonesian SMEs. Instapay would enable merchants to accept payment using social media messaging apps, like WhatsApp and Line.

Businesses would be able to use the to invoice their customers via social media, and accept various payment more quickly. Due to its portability, the company hopes that business owners could utilise the app to expand international markets and accept international credit cards. It can also accept credit card payments without website integration or EDC machine.

Approximately 1,000 merchants have signed up for and used the payment services to date.

PT MCP Indo Utama (MC Payment’s Indonesia division) country director, Valerino Wijaya said:

“MC Payment has identified pain points associated with payment processes in SMEs. This includes the inability to monitor and accept a wide range of payment channels. Instapay provides an easy mobile-based solution that directly solves these problems so businesses can focus on what they do best.”

MC Payment’s Instapay targets a few markets, such as sole-proprietor businesses like florists and tailors, small retailers selling online, as well as smaller hotels and villas. The company opines that their new service could enlarge the consumer market size for the aforementioned markets.

This is in tandem with Indonesia’s “Ayo UMKM Jualan Online” (Let SMEs Sell Online) campaign, which is aimed at attracting and persuading SMEs across Indonesia to sell products via online marketplaces. Several government bodies that have taken part in the campaign include the Communications and Information Ministry, the Cooperatives and Small and Medium Enterprises Ministry, and the Creative Economy Agency (Bekraf). Six online marketplaces involved in the campaign are Blibli.com, Tokopedia, Bukalapak, Shopee, Lazada, and Blanja.com.

The Indonesian government has a goal of getting 8 million SMEs online by 2020. As of 2017, there are a total of 59.26 million SMEs operating in Indonesia, but only 3.97 million SMEs were active online—translating to a little less than 7% of SMEs active online.

MC Payment’s CEO Anthony Koh, said,

Anthony Koh

“MC Payment is pleased to strengthen our market presence in Indonesia with Instapay. Approximately 1,000 Indonesia merchants signing with us is a testimony to the platform’s accessibility and stability. Instapay enables small merchants to save time without the hassle of going to a bank. At the same time, these small business owners will be able to manage their cash flows better.”

“MC Payment will be rolling out supporting services like mobile micro-financing and installments for SMEs in the coming months. SMEs can get small loans approved within 24 hours using their mobile phones. We will keep the public updated in due course.”

Featured image via Instapay

Leaders in blockchain technology are only three weeks away from assembling in Nusa Dua, Bali for Asia’s pre-eminent summit on blockchain technology promising to change traditional industries and forge new ones, in the same week as the annual meetings of IMF and World Bank also this year in Bali.

This summit is being organized jointly by the Indonesian Blockchain Association (ABI) and XBlockchain. It will cover similar themes, such as international wealth transfers and financial inclusion to the IMF-WBG but it will be devoted to exploring real-world instances of the application of blockchain, which has been heralded with vast potential.

The XBlockchain Summit 2018 which takes place on October 9-10, will host debates with global leaders from the United Nations, IBM, Deloitte, Stellar, Pundi X, and leading blockchain representatives and experts from various Asian industries, countries and government.

Global leaders will speak on topics spanning every use of blockchain in healthcare, financial inclusion, supply chain management, high finance, music, gaming and much more.

The Minister of Finance for Lithuania, Vilius Šapoka will share his views on how forward-thinking and friendly regulation in addition to suitable infrastructure can accelerate the adoption of blockchain technology for progressive nations and provide the view on regulation from the European Union.

Speakers of the summit will include Susan Oh of United Nations’ Blockchain for Impact, Inge Halim of IBM’s Indonesia, Paul Sin of Deloitte’s Asia Pacific Blockchain Lab, Chia Hock Lai of the Singapore Fintech Association and many more from USA, Europe, Australia and Asia region.

Stellar’s founder McCaleb will cover the future adoption of blockchain technology, and how his establishment of new global infrastructure for cross-border transfers allowed him to reach the general public. Pundi X CEO and Co-founder Zac Cheah will reveal the next generation of blockchain technology for real world implementation.

Entrepreneur-turned-legislator Jason Hsu of Taiwan will talk about The State of the Digital Economy, Blockchain, and Regulations as he draws from an extensive background in policymaking, having authored such laws as the Fintech Sandbox Act and Angel Investment Law. Hon. Dharmendar Sesungkur, Minister of Financial Services and Good Governance, Republic of Mauritius, will also address his work in making Mauritius a global blockchain centre.

Networking sessions will take place during the 2-day summit including an invite-only exclusive high-level meeting taking place as well called Blockchain on the Yacht atop the Bali sea.

“Just weeks out we are thrilled to announce that we will be having global speakers, exhibitors and high-level discussion sessions during the summit,”

said Steven Suhadi, Chairman of Asosiasi Blockchain Indonesia.

With slots quickly filling up, those interested to join the Summit are encouraged to purchase their passes as soon as possible. Ranging from $150 to $250, participants will get access to the Main Conference, Business Matchmaking Tools, XBlockchain Awards & Party, XBlockchain Lounge, and Exclusive Access to the XBlockchain Leader’s Dinner.

Register Now and get a 20% discount off registration with our code: FIN20

Fintech is a fast-growing industry across Southeast Asia, and that includes Indonesia, the region’s largest economy with an estimated population of over 260 million.

The Indonesian fintech industry has witnessed considerable growth with an estimated US$22.338 billion worth of transactions in the fintech market for 2018. Fintech companies in Indonesia raised US$176.75 million in 2017 alone and the country counts 40 peer-to-peer lending companies registered with its financial regulator.

To keep up with the rapidly evolving Indonesian fintech industry, the followings are ten fintech influencers to follow really closely:

Aldi Haryopratomo, CEO at GO-PAY

Linkedin | Twitter

Aldi Haryopratomo is the CEO of GO-PAY Group. He joined GO-JEK with a vision to accelerate the adoption of financial services for the unbanked and underbanked, particularly in rural areas where financial services are yet widely available. Haryopratomo is also the founder of MAPAN, an Indonesian lending network recently acquired by GO-JEK Group along with two other local fintech startups.

Donald Wihardja, Partner at Convergence Ventures

Linkedin

Donald Wihardja is a partner at Convergence Ventures. He has more than 20 years of experience in applying technology for various industries, from telco to banking to web startup, as manager, advisor, consultant, investment manager, and entrepreneur in Indonesia. Prior to Convergence Ventures, Wihardja was the country manager and chief information officer of 2C2P, an e-commerce payment provider offering innovative payment processing solutions for businesses in Asia-Pacific.

Jefrey Joe, Co-Founder and Manager Partner at Alpha JWC Ventures

Linkedin | Twitter

Jefrey Joe is a venture capitalist with tech, product and consulting background. Prior to co-founding Alpha JWC, Joe was the COO of Groupon Indonesia, the leading daily deals site in Indonesia where he focused on technology, customer experience and logistics. Joe also co-founded Sepulsa.com, Indonesia’s pioneer online bill payment platform, and has also been an angel investor in early-stage technology startups in Asia and the US. Joe is an active member of Indonesia technology community where he is a mentor of Founder Institute and Endeavor, and he is on the board of advisors of ANGIN.

J.P. Ellis, Co-Founder and Group CEO at C88 Financial Technologies Group

Linkedin | Twitter

J.P. Ellis is the co-founder and group CEO of C88 Financial Technologies Group, a privately-held, venture-funded technology company that designs, builds, and operates large digital financial marketplaces with embedded modern credit scoring in Southeast Asia. Its marketplaces allow consumer demand to meet financial supply from banks, non-bank financial institutions, fintech lenders, insurers and asset management companies. Over 50 million customers in Indonesia (CekAja.com) and the Philippines (eCompareMo.com) have transacted with C88 Financial Technologies Group since it was founded in late 2013.

Indrasto Budisantoso, Founder and CEO at Jojonomic

Linkedin

Indrasto Budisantoso is the founder and CEO of Jojonomic, a mobile personal financial application that aims to change the way people manage their finance. Prior to founding Jojonomic, Budisantoso was the CEO and country head of Groupon Indonesia.

Oscar Darmawan, Founder and CEO at Bitcoin Indonesia

Linkedin | Twitter

Oscar Darmawan is the founder and CEO of Bitcoin Indonesia, an Indonesian-based cryptocurrency exchange headquartered in Bali. Bitcoin Indonesia is the biggest cryptocurrency exchange in the country and as of 2018 had more than a million registered members. In March 2018, the exchange was rebranded to Indodax.

Haryanto Tanjo, CEO and Co-Founder at Moka

Linkedin

Haryanto Tanjo is the CEO and co-founder of Moka, a Jakarta-based startup that focuses on building mobile point-of-sale (mPOS) for small and medium businesses. MokaPOS can be used to manage any kind of business and the Moka POS software lets business owners do all their sales activities like tracking inventory, and recording sales report.

Reynold Wijaya, Co-Founder at Modalku and Funding Societies

Linkedin

Reynold Wijaya is the co-founder of Funding Societies and its Indonesian affiliate Modalku. Funding Societies is an online marketplace lending platform for small and medium-sized enterprises (SMEs) in Singapore to raise loans crowdfunded by retail and institutional investors. Funding Societies operates in three countries: Singapore, Malaysia and Indonesia.

Henry Kusuma Adikara, Senior Manager Commercial Finance at Cheetham Garam Indonesia

Linkedin

Henry Kusuma Adikara is a certified internal auditor, a fintech modeling expert, and a risk and audit consultant. He currently serves as the senior manager of commercial finance of Cheetham Garam Indonesia.

Hendrikus Passagi, Director of Regulation, Licensing and Supervision of Fintech, at Otoritas Jasa Keuangan

Linkedin

Hendrikus Passagi is the director of regulation, licensing and supervision of fintech at Otoritas Jasa Keuangan (OJK), the country’s financial regulator. Before OJK, Hendrikus worked for more than 27 years in the Ministry of Finance, Republic of Indonesia. He helped develop the government bond market, which includes Indonesia Retail Bond Market (ORI) and Indonesia Retail Syari’a Bond (Sukuk) Market (SRI), and drafted a number of laws and regulations.

Featured image via Pixabay

Singapore has agreed to work with Indonesia to help create a fintech learning programme for higher education providers in Indonesia, as part of an MoU for information exchange between both nations.

Temasek Foundation International (TF INTL) and Ngee Ann Polytechnic (NP) will partner with Indonesia’s Ministry of Research, Technology and Higher Education (MoRTHE) to deliver a new programme that encourages an exchange of knowledge among academia, industry partners and regulators in the fintech sphere, through Memorandum of Understanding (MoU)

Over the next three years, the three parties will collaborate to implement a fintech learning programme for higher education providers in Indonesia.  Some 180 academic leaders and faculty from Indonesian tertiary institutions will work towards developing fintech curriculums and capabilities.

The programme will include experiential learning through lab crawls, hackathons, seminars, and workshops.  The course participants will also get to visit and network with fintech developers and users to gain fresh insights into the emerging field, as well as take part in challenges that will inspire innovative applications for the financial sector. The programme will span over two runs, ending in 2020.

Higher education institutions confirmed for the first run include: Institute Teknologi Bandung (ITB), Politeknik Negeri Jakarta (PNJ), Universitas Indonesia (UI), Universitas Pendidikan Indonesia (UPI), Universitas Padjadjaran (UNPAD) and Univeristas Airlingga (UNAIR).

Clarence Ti

“There’s a lot our two countries can learn from each other as fintech starts to impact the way our populations gain access to financial services. This MoU is just a start of a conversation on how we can best support the growth of necessary skills in both our countries.” said Mr Clarence Ti, Principal of Ngee Ann Polytechnic.

Paristiyanti Nurwardani

“We hope to develop lecturers with high performance and good understanding in financial technology, to supply talent who can compete in the industry’s 4.0 era. This MoU will give a lot of benefits to Indonesia’s Higher Education, especially in universities and polytechnics in Indonesia.”

 

“They will have an opportunity to get knowledge and information about fintech, from the best resources and work together to have many innovations in fintech, as well as inspire over 4,000 Higher Education Institutions in Indonesia”, said Dr. Ir. Paristiyanti Nurwardani, Director of Learning of MoRTHE.

Featured image via Ngee Ann Polytechnic on Carousell

Grab, which started out as a Southeast Asian ride-hailing platform that has since delved into “super-app” ambitions, announces a partnership with Mastercard. The pair will be issuing joint prepaid cards geared for the Southeast Asian market.

Grab will be issuing both virtual and physical prepaid cards out of this partnership, which will be usable anywhere that accepts Mastercard. This, Grab opines, means that GrabPay of the first e-wallets hailing from this region to go global.

How The Grab/Mastercard Partnership Will Work

Consumers across the region will be able to apply for the prepaid card directly from the Grab app, and receive a virtual card in their GrabPay wallet in their Grab app. Grab will also offer a physical prepaid card, enabled by both NFC and EMV chip technology.

You will be able to reload your Mastercard Grab card through the usual digital methods, or by handing physical cash over to Grab agents like drivers and merchants that are on the GrabPay platform.

For now, the relationship between the GrabPay e-wallet and the Mastercard-powered prepaid card will remain to be seen, especially since Grab has confirmed that there will be virtual versions of the card. The obvious theory is that GrabPay wallets become the virtual version of the Mastercard-linked account, where you can make your cash deposits or make payments. Such a move would increase the usability of the GrabPay e-wallet to any terminal that supports Mastercard.

For all intents and purposes, the Grab Mastercard will be a physical extension of a virtual wallet that exists in your Grab app.

Grabbing a Hold of Unbanked Populations Across Southeast Asia

GrabPay is currently available in Indonesia, Singapore, Malaysia, Vietnam and soon, the Phillippines which showcases that the wallet has a real case for their stated target of the unbanked populations.

Individuals living in regions with a higher cash reliance can now gain access to a Mastercard ownership, which could grant access to discounts, as well as the cashless lifestyle in stores that may not offer the specific e-wallet that they have in their phones but has a terminal that accepts Mastercard.

Regions like the Philippines (34% banked), Myanmar (26% banked) and Vietnam (31% banked) could be prime targets for Grab’s Mastercard play.

Meanwhile, regions like Singapore and Malaysia, in particular, have seen a potential userbase balking at the idea of an e-wallet. After all, just handing over a debit or credit card can seem much handier and familiar than having to boot up an e-wallet app, especially for the higher banked populations in these countries, compared to many other Southeast Asian countries.

Malaysia has a banked population of 92% out of its 24 million adults, while out of Singapore has a higher 98% banked adults rate.

For them, having a more familiar card that is usable in most retail spaces (sans hawker stalls) could prove an advantage for GrabPay to rise above other e-wallets.

Grab’s foray rings similarly to AirAsia’s BigPay from Malaysia, which is also an e-wallet that is accompanied by a Mastercard-enabled card.

Grab and Mastercard expect to offer the card in the first half of 2019, starting in Singapore and the Philippines.

Featured image via Grab Vietnam

Following in the steps of international counterparts, Indonesia is setting its sights on blockchain as an enabler of increased efficiency and greater transparency with applications currently being explored in areas and industries that include e-voting and agriculture.

Jakarta, Indonesia, The Diary of a Hotel Addict, Flickr

Melbourne-based startup Horizon State, which was recently named one of the World Economic Forum’s Tech Pioneers, announced in July a project to roll out a community voter platform built on blockchain technology in the island of Sumatra which it hopes to scale-up for regional and national government elections in Indonesia.

“We’re in interesting dialogue at the moment with national and regional governments, which are interested in the future to use of the technology in regional and national government elections in the region,” Horizon State CEO Oren Alazraki told ABC.

The Sumatra project focuses on providing the 92 million members of Indonesia’s largest Muslim organization, Nahdlatul Ulama, with a digital ballot box on their mobile phones that allows them to vote on key decisions affecting their community, such as electing leaders, allocating funds and deciding on community projects.

In this particular use case, blockchain technology promises to provide trust in the electoral process itself as well as very low cost ways of verifying that these votes took place.

Another topic that’s got people excited is the use of blockchain in the agricultural sector. Startup HARA Token is trying to get Indonesia’s rice growers on the blockchain.

The company wants to use critical information like soil quality, grain price, and land ownership from farmers and field agents to help Indonesian farmers increase annual yields. Farmers who input this data into the blockchain will be rewarded with HARA Tokens, which can be exchanged for needed goods like fertilizer.

In the end, this could help make farmers more plugged-in and knowledgeable about prices, sales, and best practices. Meanwhile, NGOs and government institutions could gain access to a valuable data set that shows what’s happening in the rice sector in real time.

HARA Token wants to reach 2 million farmers by 2020 but by September 2018, they’ve only reached 7,000.

Earlier this year, tech firm Online Pajak launched a blockchain-driven app that allows customers to share encrypted tax data with institutions such as the tax and treasury offices, banks and the central bank.

As well as increasing transparency and reducing paperwork and errors, it would mean tax payers can know for sure they have paid their dues, said Online Pajak’s founder Charles Guinot.

Indonesia’s blockchain industry

Bitcoin, cryptocurrency, Pixabay

Indonesia has witnessed the emergence of a blockchain industry in recent years. Although smaller and less developed than regional counterparts like Singapore, the country is home to several noteworthy startups including Pundi X, a maker of point-of-sale devices supporting cryptocurrency, and Indodax, formerly Bitcoin Indonesia, the country’s largest cryptocurrency exchange.

In August, it welcomed a new blockchain hub called Indonesia Blockchain Hub. The hub was launched to serve as a center for developing and promoting blockchain in the country, helping unify the efforts of various local communities, drive innovation and offer education.

According to reports, five major banks, Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Mandiri, Bank Danamon and Bank Permata, are toying with the idea of implementing blockchain in their systems.

While Indonesia has so far welcomed blockchain technology, it has taken a different stance towards cryptocurrencies. In 2017, Bank Indonesia banned fintech companies using cryptocurrencies for transactions, which doesn’t prohibit trading of the digital tokens itself.

Despite the prohibition, the regulator unveiled earlier this year plans to issue its own cryptocurrency or digital rupiah backed by blockchain technology.

An assistant to Bank Indonesia’s executive director for payment systems Susiato Dewi said the digital rupiah would be trialed this year in an effort to help make the payment system more efficient. Indonesia hopes to be the first country in the world to launch a digital currency.

Featured image: Indonesia, Pexels.com.

From making the world’s first blockchain phone call, to the roll-out of eco-friendly tokens, to new public sector uses, to the tokenization of new industries the latest developments in blockchain technology were unveiled to an international audience in Bali this month.

Blockchain leaders, government ministers, entrepreneurs, and technology experts at the XBlockchain Summit 2018 spoke to the regional landscape, shared products and best practices, identified opportunities for collaboration, and addressed challenges facing the industry. Held from October 9-10, the Summit featured the latest in blockchain and cryptocurrency, focusing on innovative use cases and long-term solutions for the global market.

The Largest Blockchain Event In Bali

Adjacent to week-long IMF and World Bank annual meetings in Bali, over 500 participants spanning across 20 countries flocked to Bali, Indonesia to join the conversation, with high-profile leaders in the industry and in government headlining. Attendees included Loreta Maskaliovienė, Vice-Minister of Finance, Republic of Lithuania; Dharmendar Sesungkur, Minister of Financial Services and Good Governance, Republic of Mauritius; David Kao, Head of Singapore, Binance; Meeta Vouk, Director, IBM Singapore Lab; Zac Cheah, CEO of Pundi X; and Stephen Chia, Council Member and Regional Head of SE Asia, NEM.io Foundation, among others.

The two-day Summit highlighted several aspects of blockchain’s future development, such as the accessibility of cryptocurrencies, the blockchain economy, policy frameworks around digital technology, inclusive tech, and blockchain for business and enterprises. Over 50 speakers also delved into creative use cases, especially in the realms of economy, entertainment, gaming, and the environment.

Loreta Maskaliovienė

“When we’re talking about blockchain it’s not [just] about financial technologies; it’s important for education, for health, for the energy sector, for green investment, everywhere we’re talking about reforms, changes and challenges,”

said Loreta Maskaliovienė, the Vice-Minister of Finance, Republic of Lithuania who revealed her hopes for annual budgeting in the Baltic state to be run via blockchain technology.

“In Lithuania we’re analyzing all the different possibilities, for the food industry, for traffic, there’s a lot of possibilities. New technology is coming to daily life for everybody. We shouldn’t close our eyes.”

During the Summit, Pundi X revealed their latest device for harnessing blockchain technology: the blockchain-powered XPhone. Pundi X made the world’s first blockchain phone call on October 10, proving that blockchain can be used for much more than transactions and that it even carries the potential to decentralize data of all kinds. The phone runs on the company’s Function X blockchain, a completely decentralized ecosystem composed of five key components including the Function X blockchain, the Function X OS,  Function X IPFS, FXTP transmission protocol and Function X docker.

Binance, PundiX and Co.

Several other startups and companies showcased unique and compelling solutions for some of the biggest issues that the industry has encountered. The Poseidon Foundation rolled out a blockchain solution that will allow users to conserve the earth’s forests through high-quality carbon credits and a utility token named OCEAN. This increases the case for blockchain as a tool for social impact, which has been a major focus for the burgeoning industry.

Head of Binance Singapore David Kao announced that their fiat-to-crypto exchange will launch later this year to provide another gateway for mainstream adoption. In addition, there’s the potential for other fiat-to-crypto exchanges across Southeast Asia to help drive increased blockchain adoption throughout the region.

The issues of adoption were also discussed by Danny Baskara, founder and CEO, Vexanium, which is finding applications for blockchain at the intersection of the silos of traditional customer loyalty and reward programs. Another blockchain leading company, The NEM.io Foundation, revealed its vision for leveraging blockchain in tokenizing new assets and modernizing old industries.

The next edition of XBlockchain Summit will come to Brazil on March 29-30, 2019 and China with a date to be announced shortly.

XBlockchain Summit Bali 2018 highlights: