Cashing In On The Cashless Society

THE ongoing pandemic has forcibly shoved the world into the digital era as lockdowns and restrictions slow the global economy considerably.

As physical distancing and lack of travel meant some aspects of business were down to near zero movement, the spike in online activity was a much-needed affirmation that the world can still go on, virtually.

To varying degrees, depending on the digital penetration, many countries are embracing the virtual world and its welcoming, if not insidious, spread.

While the digital revolution is still in its early days in Indonesia, recent years have seen a surge in Internet activity through mobile devices and cloud computing. Engaging digital platforms for productivity is an obvious next step for the vast country with the fourth-largest population in the world.

Not surprisingly, digital financial payment services burst onto the scene in Indonesia, growing in strength in recent years. Indonesia’s huge domestic market has allowed for unicorns to emerge, like ride-hailing company Gojek, travel service firm Traveloka, e-commerce companies Bukalapak and Tokopedia and the digital payment service OVO, started by Lippo Group, and which has since sold off the majority of the stock to Softbank Group.

In among the mix is DigiAsia Bios, which has ambitions of bringing financial services to the masses in Southeast Asia through its business to many (B2B2C) strategy. While the big cities are moving apace, it’s the potential of the small markets that co-founder and CEO Prashant Gokarn views with interest.

Having worked in India, Latin America and across Asia, Prashant is an active investor in industries as diverse as technology and fashion and brings the knowledge to DigiAsia Bios.

He talks to STORM-ASIA about the digital spread and its impact on Indonesia.

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How does Indonesia’s digital revolution compare with the rest of the world?

“Indonesia clearly has some very strong advantages compared to many other developing countries. Very high smartphone penetration coupled with one of the lowest data prices makes the Internet available to the vast majority of the population. The culture lends very strongly to social commerce and social education. As a result, the adoption of digital content is amongst the highest in Southeast Asia and digital payments will only follow this trend.

“Within the payments space, the key challenges are around closed loops payment platforms that do not easily inter-connect and low adoption of digital payments outside subsidized use cases like ride sharing or food delivery.”

How has your experience in India helped you in Indonesia?

“Both India and Indonesia are very similar markets — large by size and very cost conscious. We offer sustainable use cases by taking out all unnecessary costs.

“The strategy differs in Indonesia as the culture here is much more win-win and we have grown very fast because we share benefits of our growth with our partners, so we all grow together.

“India is similar to China in the sense that there is less of a win-win corporate culture.”

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Talking Comms

What has been the conversion rate to digital as a result of COVID-19?

“This rate varies a lot by use case and our partner.

“For example, we have seen that in products like sales of telco airtime or gaming vouchers, there has been a significant increase in revenues, but the revenues of traditional retailers (warungs) selling airtime vouchers have declined sharply with more and more customers being comfortable buying airtime online and on apps. Traditional offline partners who were less prepared for digital sales have been very badly impacted by COVID-19.

“Buying of digital products has seen rapid conversion to buying on apps online especially in urban centres — we estimate about a 50% increase over the past 2-3 months. However, this is also because many smaller traditional retail points were closed in the lockdown.

“It will be interesting to see if customer behaviour remains at the same levels of digital purchase or a large proportion drops back to buying in retail stores as they open up. Many customers top up their telco or utility prepaid accounts when buying groceries or cigarettes, so it is too early to estimate the long term COVID-19 impact.

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What are the cash versus digital benefits?

“Cash has a cost — physical cost, delay in putting it to productive use as cash needs to be deposited, risks of losses from corruption and natural reasons.

“Digital payments additionally adds information with the transaction — this can be used to pay incentives directly, it can be used to credit score so the user has access to lower cost capital, it can help the user send money securely and with receipts to business partners or family.”

How will COVID-19 affect the digital revolution?

COVID-19 has been a wake-up call for various parts of the payments ecosystem and for our partners.

“A number of our partners who were offline only have suffered immensely and we are working with them to fast forward their digital plans so that, even post COVID-19, the businesses can also grow outside office hours. We have had time to introspect on unnecessary costs and ways to take them out.

“The COVID-19 situation teaches us a few clear lessons. Black swan events can hit without warning and only flexibility and fast decision making can help organisations and people survive.

“Jobs that have a stronger cost factor than a revenue lever have been the first to go — back office, admin, support. Everyone has to contribute revenues to a company’s growth to really survive and thrive.”

“We have seen COVID-19 as both a threat and a really strong opportunity. Very early on, we cut unnecessary costs — extra offices, admin costs, non-digital marketing, etc. Next we quickly focused on our product suite to help our partners reduce costs and products that helped make their cash on hand work longer and better.

“We are really proud that not only did we protect revenues but after a flat March/April, we were back to strong growth from May.”


If you have a point of view on COVID-19, or think someone you know could present a thought-provoking perspective on the subject, please email with your details and a short summary.

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