Revolutionizing payment solutions in Indonesia

Indonesia, a growing digital economy in the world, with eighty percent of consumers purchasing goods and services online, still suffers from various inefficiencies due to poor digital payment infrastructure. According to the McKinsey Report (2018), it was estimated that Indonesia’s e-commerce market was valued at a minimum of $8 billion USD and could reach $ 40 billion USD by 2023. However, approximately forty percent of Indonesia’s e-commerce transactions are still paid by cash or bank transfer (figure 1 below). This indicates that the digital payment infrastructure is not aligned with the increasing demand for digital payments. Transforming Indonesia’s payment infrastructure to solutions such as Open Finance may open opportunities towards improving the current payment processes.



Currently, most of Indonesia’s payment systems require the use of local currency exchange companies, creating payment inefficiencies. The main downfalls are the interbank processing transaction fees, where customers are charged different transaction fees and rates for services.

Indonesia’s most common online payment method, especially for micro-, small and medium-sized enterprises (MSMEs), is the Real Time Online Money Transfer (RTO) method. This nationwide switch provider system offers certain advantages such as improved regulatory data security. Still, the charges associated with the switch provider system and RTO interbank transfers can be a significant deterrent. According to Diego Rojas, Co-Founder and CEO, Finantier, merchants establish intra-bank transfers versus inter-bank transfers to avoid transaction fees and benefit from same-day settlement times. However, the disadvantage lies where merchants require multiple bank accounts to coordinate with multiple customer bank accounts, a manual-intensive management of accounts.

With emerging technologies, such as Payment Gateway, certain advanced payment solutions have paved the way to alleviate payment processing fees and help provide seamless transaction methods between merchants and customers. The payment gateway acts as an intermediary between merchants and customers where deposit transactions are transferred from customer to merchant, reducing fees per transaction and the management of multiple bank accounts (Indonesia currently has over 500 banks in the region). However, merchants may be challenged with managing cash flows as settlement time may range from one to more than four days.

Open Finance

A newer payment processing solution and still under regulatory review, Open Finance can assist in reducing transaction fees, connecting multiple financial APIs, and serving a wider range of payment and withdrawal methods. This makes it a pathway for Indonesia’s improvement of payment processing activities.

Finantier’s Open Finance API platform, a user-friendly interface system, enables merchants to process payments using intra-bank transfer methods at no cost. Furthermore, this platform utilizes UX and UI technology to provide improved usability and better customer experience. Merchants are able to manage payment transactions from multiple banks under one integrated console.

Progress in Indonesia’s payment network

Bank Indonesia (BI) established the National Payment open API Standard (SNAP) (August 2021) to simplify the integration of financial APIs. BI SNAP, a standard set of procedures still under regulatory review, helps in connecting multiple APIs in processing payments transactions. BI’s goal is to introduce an innovative payment system in Indonesia through a unified standard under SNAP. To further move towards this goal and help meet consumer demand for a cost-effective payment system, BI expects to launch BI FAST, a new real-time retail payment system, in December 2021 (22 banks to join in the initial phase). According to Finantier, BI FAST’s maximum transaction fee is roughly USD 0.20 per transaction (less than half that of RTO).

Light at the end of the tunnel

There is a proven need for Open Finance in Indonesia to build a more advanced digital payment infrastructure. According to BI, the goal is to transform Indonesia’s financial system by 2025. The Open Finance concept not only offers digital payment capabilities, but also credit scoring and e-KYC, which will help promote financial inclusion, particularly to those Indonesians who do not have bank accounts or are underserved.

For more information, please visit: or Finantier | Build the next big thing leveraging our Open Finance Infrastructure across Southeast Asia

Bank of Ireland and EVO renew partnership

Bank of Ireland, one of the largest financial services in Ireland, continues their merchant acquiring and payment processing partnership with EVO, a global payment technology and services provider. The partnership will continue to offer payment services under an exclusive marketing alliance known as BOI Payment Acceptance (“BOIPA”).

Founded in 2014, BOIPA provides merchants in Ireland and UK with expertise in EVO payments and supports the Bank of Ireland’s broader customer relationships through its branch network, commercial banks, corporate banking and digital channels.

Both Henry Dummer, Director of Everyday Banking, Bank of Ireland, and Darren Wilson, President, International, EVO, agreed that the unification between EVO and Bank of Ireland will enhance the Irish market landscape’s acceptance of digital payments across their client base.

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South Korea and Worldline join forces to enhance cross-border payment transactions

South Korea, a digitally advanced country, partners with Worldline, a global payments and transactional services company, to expand e-commerce payment solutions to meet the specific needs of companies looking to develop or expand their online business in South Korea. This proposal helps businesses process local payments and have access to this strategic market without the need to establish a local business unit.

With US$ 9.5 billion in cross-border e-commerce transactions in 2020 and 75% of online consumers shopping cross-border, South Korea offers an attractive opportunity to expand its market. In fact, with an estimated population of 52 million, South Korea’s mobile shopping accounts for 65% of the total value of e-commerce, but ranks fifth in the world for ease of doing business.

This partnership will help global e-commerce merchants reduce payment processing challenges and enable customers access to the digital commerce market while meeting their needs and preferences.

Below are Worldline’s features to support customers:

  • No local entity requirement for payment processing in South Korea
  • Local cards processing and currency increasing conversion rates
  • Access to local acquiring further increasing payments performance
  • Combined pricing and no cardholder surcharge (minimizing cross-border fees)
  • Same-day exchange of preferred currency (limiting FX risk)

To promote cross-border growth, this solution enables optimization of payment performance, minimizes complex processes, complies with regulatory standards, and assists global businesses into high growth markets such as South Korea, according to Roger Niederer, Chief Market Officer, Merchant Services, Worldline.

Please click here for more information. Online Cross-Border Expansion With Online Payments | Worldline

South Africa joins the e-commerce game: Major 2021 advancements

The race to a contactless digital society continues to make progress around the world, specifically since the pandemic began. South Africa adopted e-commerce, mobile commerce and digital payments in 2021, a phenomenon in this part of the globe. The four major banks, Absa Bank, Standard Bank, Nedbank and First National Bank (FNB), have seen a significant surge in these payment approaches. According to Andrew Springate, CEO of technology and financial gateway service provider, PAYM8, the e-commerce trend will be exacerbated in years to come with more convenient solutions available on the platform of choice for customers, such as WhatsApp.

South Africa is enthusiastically preparing for success in preparation for the growing digital transformation. Some of the recent developments in 2021 are:

  • DebiCheck: (Launched November 2021) An authenticated collections solution that provides consumers upfront knowledge about their debits through an electronic authentication process, ensuring that debits will be authorised legally and rule out any cash flow management strategies from abusive consumers. Springate further explained that customers only need to electronically approve new direct debit orders once and provide contract details to the bank. Therefore, direct debit orders outside these terms are prevented.
  • Instant EFT: A streamlined version of the traditional electronic funds transfer method. Once Instant EFT has been selected, customers are prompted to choose their bank and enter their internet banking credentials. However, there are risks associated with this type of payment method. The South African Reserve Bank (SARB) has warned South African consumers and the payments industry about the risks associated with this payment method. SARB does not support the use of screen scraping (a method where sensitive bank account data is transmitted to third-party processors) to effect payments. These types of transactions can expose consumers to data breaches, fraud, financial losses, and violations of banking terms and conditions regulated by internet banking rules.
  • Rapid Payments Project (RPP): An inter-banking payment system poised to revolutionise digital transactions in SA. This innovation is set to roll out in 2022 according to the Payments Association of South Africa. Springate commented on RPP’s capabilities to enable customers to initiate real-time bank account-to-account payments using a unique identification code in a secure and efficient way. RPP may be the most preferred electronic payment option in South Africa by 2023.

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EMEA’s SAP cloud migration by 2023

According to a survey of EMEA companies commissioned by Lemongrass, a software enabled services provider, half of SAP enterprise capabilities will be moved to the cloud over the next two years. Some of the main benefits offer improved performance, increased stability, and significant cost saving.

Some of the challenges companies that have not migrated to the cloud yet are faced with include the following:

  • Security
  • Difficulty in finding the right cloud provider
  • Integration into a wider non-SAP space
  • Uncertain decisions about SAP S / 4 HANA

However, Lemongrass research found that “more than half of enterprises (55%) plan on migrating their SAP workloads to the cloud in the next 12 months, believing it will help them achieve better agility (80%), security (78%) and a reduction in operating costs (73%).” Mark Hirst, Managing Director, EMEA and APAC, Lemongrass, stated that there is a clear indication for companies migrating SAP systems to the cloud infrastructure, with some having migrated less than ten years ago. Previously, SAP core services on cloud was regarded as a risk, while now SAP on cloud has become a mainstream platform. Some of the top concerns pertained to legacy systems, lack of internal skills, and using the right cloud services provider. “While some of the old concerns around SAP on cloud, such as security, still exist, they are now very much seen as one the major benefits as well,” said Hirst.