JAKARTA (Reuters) – Indonesia plans to impose fixed fees on a number of e-wallet transactions, five people familiar with the matter said, a move that could choke a vital stream of revenue and increased costs, for the payment of start-ups supported by the likes of Alibaba’s Ant Financial.
FILE PHOTO: A sign of the FOCUS of payment, it is seen at a shopping mall in Jakarta, Indonesia, on November 8, 2018. The photo was taken on November 8, 2018. (REUTERS photo/Beawiharta/File Photo
– The providers of e-wallet services in the South-east Asia’s largest economy, at this time, adjust the fees for the vendors, the charging of a premium to large retailers, and the collection of fees for the smaller merchants, in an attempt to get them to use their platforms.
However, the Bank of Indonesia has already held talks with the largest digital payment startups to make it at the QR code to the transactions and the uniform, to the people, said, the construction of the road in the month of August for the standardization of electronic payments, which make use of matrix bar code.
The Bank of Indonesia has not responded to repeated messages and phone calls requesting comment.
Leading the pack of the e-wallet companies in the country, it is home-grown ride-hailing startup Gojek, supported by companies such as the letters of Google, and the startup FOCUS, in which Gojek a rival Pack has a vested interest. Ant Financial is an e-wallet, HE trails them, along with the state-owned payments platform LinkAja.
The central bank wants to determine the number of e-wallet transactions costs 0.7%, and the people attached to it, a move that would scare off the smaller dealers, who pay don’t stay on the e-wallet, the network, or the power of the latter to increase the incentives.
Total cost of ownership for payments made to the larger vendors, such as Starbucks, which is currently calculated to be as much as 2%, this could dent revenues for the e-wallet companies, the people said.
The start-ups have burnt through millions of dollars in incentives to lure suppliers in thailand, which is a multi-billion dollar digital payments industry has been thriving, as more than half of the nearly 270 million people have no bank account.
In the land of the internet economy was $40 billion this year, and is expected to grow by more than three-fold by 2025, according to a report published by Google, Temasek and Bain & Co.
The Bank of Indonesia has yet to decide on the cost of transactions that can be performed on the larger providers, and it is said a person close to the talks, adding it can also be set at 0.7%.
A major retailer is usually a fee of about 0.5% to about 2%, and that was one of the people said. As a benchmark, mastercard, Visa, and Mastercard charge around 2% to 3%.
“It will hurt all of us,” said an executive at an Indonesian e-wallet business, which it was not authorized to speak to the media and did not want to be named.
The compensation that will be earned in the e-wallet transaction, it would have to be split three ways under the new system, the sources said, the e-wallet companies, middle-men, payment processors, and the National Electronic Transaction with a consortium of major Indonesian lenders.
Up to now, the e-wallet companies, or obliged to pay the whole fee or a split in any of the payment processors and not lenders, have been involved.
Representative DANA GoJek, and the Focus has not commented on the uniform rate proposal, but said that Indonesia’s move toward the standardization of the QR network, it is good for the industry.
Reporting Fanny Potkin; Editing by Sayantani Ghosh and Himani sarkar