It had been a while since I returned to my home country Indonesia. As part of my pre-departure packing routine, I sent a text to my mother to confirm something that I never thought I would ask before: Should I bring some cash?

And her answer was something that would not sound plausible five years ago: Bring a small change, just in case.

Back in 2015, when I first joined e27 as Junior Correspondent, Indonesia is widely known as a cash-heavy market. Some tech companies such as DOKU aimed to introduce e-payment in the market, but their progress was limited. The market remained heavily reliant on cash, with the use of debit and credit cards limited to outlets in glitzy malls. Back then, if anyone told me that there would come a day when people would be able to use e-payment to buy food in street stalls, I would be extremely suspicious (and my ancestors would roll in their graveyards).

But last week, as I landed in Jakarta, I realised that what was once impossible is now a reality in the country. The use of e-payment is finally part of our everyday lives.

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Indonesian e-payment landscape today

Like any good Indonesian, the first thing I did upon landing was to visit my favourite street food stalls. I was expecting to get my wallet out to pay for my portion of nasi uduk, but surprisingly, there was absolutely no need for them. Right there on my table was a small placard containing QRIS–Quick Response Code Indonesia Standard–belonging to this particular stall. As I finished my dinner, customers repeatedly grabbed this placard to make payments.

Of all the visitors that came and went that night, I believe only a few actually used cash to pay for their food.

This brought me to the days when Go-Pay and its competitors OVO and TCASH began what might as well be known as the launch of the Indonesian e-payment future. Before these platforms, the use of e-payment services was limited to a select few. But these platforms turned e-payment into something widely popular, and they were able to do it by reaching out to the grassroots community: Street food vendors, ojek drivers, and warung owners.

In short, Go-Pay, OVO, and TCASH were able to secure their positions in the market because they were able to initiate digital transformation in a community that was commonly seen as “unbankable”.

But as in many countries, the use of e-payment services did not fully take off until the COVID-19 pandemic. It was as if Indonesia had begun tinkering with it before the pandemic, but now they were pushed to delve fully into it.

But right before the pandemic forced us to stay indoors and cancel whatever plans we had, in May 2019, Indonesia introduced a platform that enables this digital transformation to accelerate fully: QRIS.

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“The aim is to universalise cashless payments in the country through a system that integrates all those digital payment apps people have installed on their smartphones. One code to rule them all,” The Jakarta Post wrote in an editorial in February.

“BI has been pushing QRIS ever since, working with commercial banks, e-wallet providers and businesses to get ever more merchants to put up the code for customers to scan, down to the level of street vendors.”

The article proposed that with its relatively low transaction fee, and the ease it provided to vendors, there is a possibility that the use of QRIS might even threaten the popularity of mobile wallets–the very platforms that have helped Indonesia to get to where it is when it comes to the use of fintech services.

So, what is next?

Honestly, I think it is quite extreme to say that the use of QRIS might threaten the popularity of mobile wallets.

In November 2022, an InsightAsia report declared Go-Pay as the most popular mobile wallet in Indonesia with 71 per cent of mobile wallet users using the platform, according to CNBC Indonesia. This number was closely followed by cash (49 per cent), bank transfer (24 per cent), QRIS (21 per cent), pay-later (18 per cent), debit card (17 per cent), and virtual account transfer (16 per cent).

From these data, despite Bank Indonesia’s effort to further accelerate the use of QRIS (which includes an expansion to Malaysia), it might take a while until Indonesians are ready to give up their favourite mobile wallets. Besides, we know that Gojek is not going to sit and watch it happens. Now that the company is publicly listed, there will be a greater push for the unicorn to improve the performance of its mobile wallet.

In the meantime, I am going to enjoy the fact that Indonesia has made progress in its effort to transform itself digitally. It is the kind of good news that we have been waiting for.

I am also going to buy my second helping of mie Aceh in a nearby stall for the second time in the last few days.

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This article was first published on June 5, 2023

The post After QRIS, what is next for the Indonesian e-payment ecosystem? appeared first on e27.