Jakarta, Jan 10 (Antara) - Advancements in digital technology have offered a more convenient and practical cashless transaction facility without the need to carry heaps of banknotes in the wallet.
There is an increasing trend among Indonesia's millennial youth and also the elderly generation to make electronic payments through cashless transactions using debit cards, credit cards, and electronic money, or e-money, among others.
Electronic money transactions showed a significant growth until the end of November 2017, with a total nominal value of Rp1.64 trillion, up 98 percent year-on-year (yoy) compared with November 2016.
Bank Indonesia's (BI's) statistics in Jakarta on Tuesday indicated a nominal growth of 98 percent and a rise in volume of 93 percent to 128.51 million transactions, from 79.22 million recorded in November 2016.
With regard to the amount of electronic money in circulation until November 2017, BI has recorded 113.72 million transactions, or an increase of 130 percent from 49.41 million recorded during the same period in the previous year.
Based on surveys, most Indonesian millennial youth preferred transactions through a cashless system by using debit cards, credit cards, and electronic money.
The conclusion was reached following the result of a research conducted by Brilio.net digital publishers and JakPat Mobile Survey, Joe Wadakethalakal, the CEO and co-founder, Brilio.net, noted via a press release in Jakarta on Thursday (Jan 4).
"From the research, we found that 63 percent of Indonesia's millennial youth require credit cards, and 66 percent admitted it was difficult to know which credit card best suits their needs," Wadakethalakal stated.
The research was conducted on 1,021 respondents in the age group of 21 to 37 years from 34 major cities in Indonesia. It also found that most millennial credit card expenditures were for electronic devices, at 27 percent; food and beverage, 25 percent; traveling, 23 percent; and fashion, 15 percent.
The tendency to use electronic devices in business also boosts the development of electronic trade or e-commerce. The online trading system or e-commerce has grown rapidly in recent years, as it offers a special service for consumers to shop or order goods through online media.
Indonesia's e-commerce transactions still account for some one to two percent of retailer transactions, or much lower than the global average of eight percent. However, it is forecast that e-commerce transactions in Indonesia will increase drastically, from US$12 billion in 2014 to some $24.6 billion.
Hence, the government believes that the e-commerce industry is one of the business sectors having high prospects in future, and to this end, it is issuing an e-commerce development roadmap through an economic policy package.
The roadmap is included in the 14th economic policy package announced by the government in November 2016. The policy package is aimed at encouraging people across Indonesia to expand their economic activities efficiently and to connect them to the rest of the world. With this roadmap, they will be able to better enhance their business.
Based on data at the Ministry of Communications and Information Technology, the value of online trading transactions or e-commerce reached Rp200 trillion ($14.9 billion). Currently, internet users in Indonesia account for 93.4 million people and smartphone users reached a total of 71 million, who are all a potential market for online businesses.
According to the Capital Investment Coordinating Board (BKPM), e-commerce is one of the two economic sectors that has strategic potential to be developed.
"First is tourism, as it has fast results, impact on the field of work, and income, including foreign exchange earnings," Head of BKPM Thomas Lembong noted after a limited meeting on investment and trade with President Joko Widodo at the Merdeka Palace in Jakarta on Friday (Dec 5).
The second sector is e-commerce. Lembong explained that it provided a large investment figure of over $5 billion in 2017.
"This is half of last year's investment in the oil and gas sector, so the value is huge, and the growth is very high," the head of BKPM stated.
He explained that the growth in e-commerce reached 50 to 80 percent year-on-year. In addition, the government will invite investors in the field of e-commerce from Europe, Japan, China, and the Silicon Valley in the United States.
Related to the rapid growth in electronic money transactions, BI will issue a revision or amendment of its Regulation Number 16/8/PBI/2014 dated April 8, 2014, on Amendment to BI's Regulation Number 11/12/PBI/2009 on electronic money.
BI Governor Agus Martowardojo had earlier stated that his central bank will revise the regulation on electronic money whose revision will be issued in early 2018. In revising the regulation, the bank will discuss requirements to obtain a permit for an entity using a close loop payment system in its internal transactions.
Later, companies involved in electronic money activities using the close loop system will be required to obtain a permit based on the number of their users and nominal transactions.
In addition, if the close loop payment system is in the holding (company) and is used for all of its subsidiaries, the owner of the internal electronic money must also apply for a permit. The regulation is made to anticipate the rapid growth in cashless transactions and online trade or e-commerce.***3***(A014/INE)EDITED BY INE(T.A014/A/BESSR/A. Abdussalam) 10-01-2018 15:58:4 |
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