JAKARTA, Jan 29, 2020, The Business Times. The value of Indonesian card transactions is expected to see compound annual growth of 7.1 per cent from 2019 to 2023, according to an industry consultancy. Overall payments by plastic could jump from 639.9 trillion rupiah to 821.2 trillion rupiah over that period, with the growth to be fuelled by the higher use of debit cards, The Business Times reported.
In fact, debit card spending is likely to overtake credit cards in 2019, and will eventually make up half of all card transactions by value, GlobalData analysts have projected.
Lead banking and payments analyst Ravi Sharma noted that growth has been supported of late by government initiatives such as cash transaction limits and financial access in rural areas.
For instance, Indonesia has rolled out a national payment gateway for a domestically inter-operable ecosystem, and is in the process of moving all ATM and debit cards to the EMV chip standard with a mandatory six-digit PIN, to boost security measures.
Drivers such as better payment infrastructure, lower card acceptance costs and e-commerce “are all anticipated to support the Indonesian payment card market growth”, Mr Sharma noted.
Citing digital bank launch plans by Singapore’s DBS Bank and United Overseas Bank in the Indonesian market, GlobalData added that “the emergence of mobile-only banks in Indonesia is likely to further accelerate the shift towards electronic payments”.