Cashless Society through Indonesian People’s Binoculars
In this digital era, no one can escape the progressive technology advancements, including most people in Indonesia. Especially after the Government launched Gerakan Nasional Non-Tunai (National Non-Cash Movement) on August 2014, more and more fintech companies are more active in normalizing the benefits of cashless payment that include practicality, increase of money circulation, more accurate economic planning, and reduction of the printing money cost. However, the fact is the acceptance for cashless services across Indonesia is not evenly distributed. Including some of the sellers from warungs, kiosks, cafes, street food stalls, cafes, and etc.
Furthermore, Indonesia is still not ready to be transitioned to the industrial revolution 4.0 due to the fact that the internet infrastructure in remote places, in particular, are not ready, and also because of the low literacy rate. The 2016 Otoritas Jasa Keuangan (Financial Services Authority) survey stated that the literacy rate of our society is only 29.66 percent of the total population. That means only 75 million of 240 million people. Indonesian people are still more comfortable using cash.
Based on the survey data shared by PT Visa Worldwide Indonesia, 40 percent of the respondents still chose cash payments. Followed by the use of credit or debit cards by 39 percent, digital wallets by 18 percent, and 3 percent chose the contactless method. Regardless of this gap in society, fintech companies have created an inevitable trend that is quite impactful amongst the Indonesian people. The fact is, Bank Indonesia has recorded 64 percent of the population in Indonesia is still unbanked and 42 percent of the population is millennial. In addition, the number of smartphone users in this country also continues to increase to 310 million. Hence, this is where the perfect sweet spot for every fintech companies to penetrate the market lies.
Fintech companies have created a trend which resulting in the demand from Indonesian people to have more instant and secure transactions anywhere and anytime they want. Besides the efficiency of the fintech companies provide in its applications, the users are also allowed to control the balance of your money between money coming in and money going out through the notification they can certainly see on the amount of money that has to be spent on bills. Even though cash payment is still preferable, people realize the danger of constantly of using this form of money since it can be anonymous and untraceable on the transactional processes, making it vulnerable to criminal actions that include bribery, tax evasion, money, counterfeiting, corruption, and terrorist financing. Fintech companies are able to tackle this safety issue by the technologies they provide such as biometric data, tokenization, and encryption.
As Indonesia has indeed become one of the largest countries that successfully triggered the growth of fintech businesses with 330 million smartphone users and 88 million people active internet users, there is a need to build a collaborative synergy between fintech companies, the banking industry, and especially with Otoritas Jasa Keuangan who would ensure the safety on fintech companies’ systematic impact to Indonesia’s financial stability. Therefore, financial service network could be widely spread among the local citizens, and financial inclusion in Indonesia could grow.