Author: Rohmad Fuad Armansyah, SE., M.Si. dan Moch. Bisyri Effendi, S.Si., M.Si.
Payment transactions have progressed in line with current technological developments. Technological advances in the payment system have replaced the role of cash, which is known to the public as a means of payment in general, into a more effective and efficient form of payment. It is also supported by the digital market in Indonesia which accepts payment transactions using a non-cash payment system.
Fast, safe, convenient, easy and efficient in transactions are the reasons for the acceptance of this cashless payment system and it has been further developed to facilitate transactions. The development of information technology, followed by a higher level of bank competition, has encouraged innovation in providing various non-cash payment alternatives in the form of a transfer system and payment instruments using electronic card (electronic card payment) that are safe, fast and efficient, as well as global in nature. One of the technologies in the financial sector that is now often used is the cashless payment method or transactions without having to use physical money. Using some kind of electronic money. That way, it is easier for humans to make financial transactions anywhere. The convenience that is obtained when doing cashless transactions is:
1. Save Time and Practical
One of the advantages of the cashless payment method is the time-saving and practical process. By using electronic money, you don't need the hassle of carrying cash. Especially if you are going to make transactions in large amounts of money, of course, it will be troublesome because you carry large amounts of cash when traveling. Moreover, at this time the crime rate is increasing so that it is prone to crime.
2. Minimizing Criminal Actions
As explained earlier, crime still occurs frequently. Anywhere and anytime, you can experience a crime. Especially for those of you who have busy activities by taking public transportation, of course the presence of electronic money is the right solution. Simply by using electronic money, you have minimized crime on the streets.
3. No Need to Queue Long
Another advantage of electronic money is its efficient use, so you don't have to queue for a long time when making any transactions. You just need to tap the electronic money card and you can do all your activities easily.
4. Many Promos
Providers of these electronic cards usually collaborate with various vendors, such as supermarkets, restaurants, coffee shops, and others. No wonder so many attractive promos are offered. You can get some of these benefits for free by using electronic money.
5. Can Be Searched To Know Its Existence
As a user of electronic money, of course all your personal data will be connected. This will help you find out the whereabouts of electronic money if there is a loss or misuse of funds. Of course this is very profitable. For example, you lose the e-card, you can track it so that you don't lose money.
Behind the advantages, the cashless payment method also has drawbacks. Here are four drawbacks.
1. Shop more often because of the many promos
As previously explained, electronic money does provide lots of attractive and profitable promos. However, this will make it easy for you to be tempted by these promos which then cause you to be unable to control your spending. What was profitable, of course, will make expenses even more wasteful. Therefore, use it wisely.
2. Vulnerable to Cyber Crime Actions
Having electronic money will certainly facilitate all the transactions you make. However, did you know that electronic money is very vulnerable to cyber crime? This is one of the drawbacks of electronic money. Therefore, be careful to save your electronic money. Don't forget to always change the password every month so that it doesn't fall into the wrong party easily.
3. Tend to Want to Continue Shopping
Even though it feels like you don't have cash, the use of electronic money will make people tend to shop. This is what then encourages a sense of wanting to continue shopping. The feeling of spending no money at all makes you constantly buy the things you want. After that, only then do you realize when your expenses have swelled up.
4. Still Limited
Even though it makes the transaction process easier, there are still a few vendors who collaborate with the bank that issues the electronic money. Therefore, it makes it difficult for users to find places that can make payments using electronic money because not all places offer payments using a cashless system.
Figure 1. Graph of E-money Application User Development
The illustration data above may be used as an example. Are all of the above electronic money providers evenly distributed in Indonesia? Go-Jek has spread in only a few big cities. Most of the use of e-money is for payment of tolls, KRL and buses, which are only available in big cities. In short, infrastructure is a very important factor in supporting the cashless transaction movement in Indonesia.
Figure 2 Graph of Payment Instruments for Various Transactions
Mobile payment services are increasingly popular with the increase in smartphone use by up to 70% in the last five years in Indonesia. Moreover, there are more card-free e-wallet applications for transactions. Based on data from Bank Indonesia, 38 e-wallets have received official licenses. In 2018, e-wallet transactions in Indonesia reached USD1.5 billion and is predicted to increase to USD 25 billion in 2023. But who is the most popular e-wallet in Indonesia?
The large number of local players in the Indonesian fintech industry makes local e-wallet applications still the prima donna for cashless solutions in Indonesia. Based on Q2 2019 data obtained from App Annie, the top 5 e-wallet applications with the most monthly active users are still occupied by local players, namely Go-Pay, OVO, DANA, LinkAja, and Jenius.
Similar to the number of application downloads, local e-wallet applications managed to rank in the top 5 with Go-Pay in first, OVO in second, followed by DANA in third, LinkAja in fourth and iSaku in fifth. Jenius is not limited to an e-wallet application, but is a banking application that allows users to make transactions between different financial platforms such as topping up other e-wallet balances and sending foreign currencies both offline and online. The bank product e-wallet application has many monthly active users in Indonesia. Most of these e-wallets are connected to user accounts at the respective banks.
There are 4 bank e-wallet application products from all e-wallet applications that are active in the fourth quarter of 2017. Each bank is CIMB Bank with Go Mobile by CIMB, BTPN with Jenius, BCA with Sakuku and Bank's Mega Mobile. Mega.
In Q2 2019, 4 bank-owned e-wallet applications are in the top 10 with the most monthly active users. “Old players” still exist, namely Jenius, Go Mobile by Cimb, and Sakuku. Another player is Mega Mobile owned by Bank Mega, which managed to enter the list of the top 10 e-wallet applications with the most monthly active users in the period Q4 2017 to Q2 2018. "
Go-Pay as one of the products of the first decacorn startup in Indonesia Go-Jek is the e-wallet application with the most active users in Indonesia. Although the Go-jek application is not classified as a finance application on App Annie, according to information from Medium 30% of total electronic money transactions in Indonesia come from Go-Pay. February 2019, Go-Pay managed to touch a transaction figure of USD 6.3 billion with a total of 70% obtained from Go-Jek transactions using Go-Pay as a payment method. Go-Pay is also the main payment method of Go-Food, which is also the largest food delivery application in Southeast Asia. In addition, it is reported that through DailySocial, Go-Pay is also officially one of the payment options available on Google Play after the realization of the investment that Google launched into Go-Jek early last year.
OVO, Lippo Group's e-wallet application, was ranked second based on the number of application downloads in Q2 2019. OVO can be used as a payment method for offline transactions at Matahari Department Store and Lippo Mall. For transportation, OVO is a payment method in Grab Indonesia, expanding the OVO collaboration to also partner with the Indonesian unicorn e-commerce, Tokopedia with OVO Cash. The collaboration between OVO and Tokopedia is a big step towards increasing the number of OVO users in Indonesia. Based on data from Map of Ecommerce Indonesia Q1 2019, Tokopedia is ranked first on the iOS and Android platforms.
If you look at the graph of OVO's development, the number of app downloads decreased from 2nd to 3rd in Q1 2018, but for monthly active users, OVO increased by one place in Q1 2018 beating LinkAja. Quoted from the Jakarta Globe, the collaboration between OVO and Lion Air Group has also increased OVO users. This collaboration provides additional benefits for OVO customers by getting 20,000 loyalty points equivalent to IDR 20,000 every time using Wings Air, Batik Air and Lion Air airlines.
DANA as a newcomer to e-wallet applications in Indonesia immediately showed its persistence in becoming the pioneer of e-wallet applications in Indonesia. DANA was first present in Indonesia in 2018 and immediately introduced an open platform based service. Based on iPrice Group Research data, DANA has relatively stable monthly active users from Q4 2018 to Q2 2019. Dana managed to climb one rank in the second quarter of 2019, replacing LinkAja in third position. In contrast to the number of application downloads, DANA fell one place to position 3, replaced by OVO in Q2 2019. DANA is an e-wallet application service created by the collaboration between the Emtek group and Ant Financial, which is also an official e-wallet application that can be used for transactions in e-commerce. Bukalapak via BukaDompet
Source: iPrice Group
There are several advantages and disadvantages of using electronic money. Therefore, as a user, it is important to use it wisely. What you can benefit from and what is harmful should be avoided. Hopefully this information is useful and you will be wiser in using the cashless method.