, Indonesia
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Left to right: LinkaAja Chief Commercial Officer, M. Rendy Nugraha, Dana Chief Technology Officer, Norman Sasono and Chief Editor Asian Banking and Finance, Tim Charlton

Demand for digital payments growing in Indonesia

Two digital financial service leaders underscore collaboration over competition.

FOLLOWING the lead of Indonesia-based digital financial services firms, participants to the recent Asian Banking and Finance Forum 2024 realised the growing demand for digital payments in the country and the need to refine it.

Speaking at the forum held on 14 May at the Shangri-La Jakarta, were Dana Chief Technology Officer Norman Sasono and LinkaAja Chief Commercial Officer M. Rendy Nugraha. In a dynamic back-and-forth, they shared insights on how their respective companies are adapting to meet the growing demands in this sector.

“The most important thing on how to adapt with the demand of the customer is to get feedback from the customer,” asserted Sasono, citing Dana’s continuous effort to stay responsive to customer needs through an iterative process of building, measuring, and refining their services.

He said Dana employs various methods such as real-time app usage data, focus group discussions, surveys, and social media feedback to guide their development process.

Dana also stressed the importance of fostering innovation through a unique internal strategy akin to a “startup within a startup.”

This approach, he said, allows small teams to experiment with new ideas rapidly. “If it dies, it dies. If it takes off, then we will really refine that particular feature,” said Sasono, noting that his company bears the willingness to take calculated risks.

 On the part of LinkAja, Nugraha outlined a multi-faceted strategy, which extends beyond retail to B2C and B2B services.

“We gather a lot of feedback coming from the apps, social media, and our clients,” Nugraha said. LinkAja leverages partnerships with enterprises to gain insights from end-users indirectly, ensuring they address a broad spectrum of needs within the ecosystem.

Similar to Dana, LinkAja also engages in experimental projects, albeit on a smaller scale. These projects are designed to be agile and are evaluated based on specific objectives and metrics.

“We would like to make this as fast as we can, but also with very measured metrics,” said as he stressed the importance of speed and precision in their innovation efforts.

Innovative features and future plans

When asked if new features are to be introduced, Sasono mentioned that Dana is now focused on expanding its core functionalities such as money transfers and payment services.

Dana is also venturing into other financial services like lending, investment, and insurance. “We really want to become the daily financial lifestyle, not just payment,” he said.

He cited the introduction of cross-border payments as one of Dana’s significant advancements. “Previously, we were in Thailand. Now, we’re going to have one in Malaysia and Singapore, and later this year in Japan,” Sasono announced, highlighting their efforts to facilitate seamless international transactions for their users.

LinkAja, on the other hand, is growing its comprehensive ecosystem, particularly in transportation and fuel services, which cater to daily necessities. “We are one of the few players that have a very complete ecosystem in regards to transportation,” said Nugraha.

He said LinkAja is also enhancing its capabilities in supply chain payments and other corporate financial transactions, aiming to serve a broader range of business needs.

Staying relevant

Both Sasono and Nugraha underscored the importance of collaboration over competition in the crowded digital payments market.

“We want to collaborate instead of fighting each other to help the nation get financial inclusion,” Nugraha told the Jakarta forum.

Sasono echoed this sentiment, emphasising Dana’s commitment to being an open platform that integrates with various merchants and financial institutions.

Addressing concerns about the misuse of digital payment channels, both executives highlighted their robust security measures. “We regularly get certifications regarding the security of our system,” Nugraha said.

Sasono added that Dana works closely with the Central Bank of Indonesia to ensure compliance and address any instances of misuse.

Reaching the last mile

In terms of expanding digital payment services to underserved areas, both companies have distinct yet complementary approaches.

“Dana users are actually more than 60% in the Tier 3, Tier 4 cities,” Sasono revealed, indicating their focus on reaching beyond major urban centres.

Nugraha, for his part, harped on LinkAja’s strategy of leveraging its extensive network and collaborations with state-owned enterprises to enhance financial inclusion in rural areas.

The discussions at the Asian Banking and Finance Forum 2024 underscored the dynamic and collaborative efforts of Dana and LinkAja to meet the evolving demands for digital payments in Indonesia.

Through continuous innovation, strategic partnerships, and a commitment to security and inclusivity, both companies are poised to play a pivotal role in shaping the future of digital finance in the region.

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