Wawan Suwandi opened his first checking account nine months ago when he became a bike taxi driver for Go-Jek, an Indonesian ride-hailing company.
“I never felt the need to have a bank account before,” said Suwandi, in his 30s, who works in his hometown of Tangerang, on the outskirts of Jakarta.
Go-Jek helped Suwandi arrange an account so he could receive direct electronic payments from customers using the corporate’s mobile wallet, Go-Pay.
“Some drivers still prefer to be paid in money, but I feel that is only those who’re too lazy to learn recent things. Go-Pay makes it [transactions] easier.”
In addition to having fun with the convenience of smartphone banking, Suwandi says Go-Jek drivers with good performance rankings can benefit from other advantages. Several banks offer Go-Jek drivers the chance to take out a mortgage or save for the Hajj pilgrimage.
“I’m recent to Go-Jek, but I hope to be eligible soon [such benefits]too.”
Suwandi is considered one of tens of millions of Indonesians who recently opened a checking account for the primary time due to recent economy firms resembling Go-Jek.
The rapid adoption of smartphones and easy-to-use electronic payment apps are enabling Indonesia’s vast unbanked population to learn in a way that the country’s traditional banking sector has never been capable of achieve.
This is nice news for Indonesians and their country’s economy.
The World Bank sees access to financial services as a “critical step” toward reducing poverty and inequality.
“Financial inclusion allows people to save for their families, borrow money to support their businesses or build a financial cushion in the event of an emergency,” World Bank Group President Jim Yong Kim said in April.
In April 2016, Go-Jek entered financial technology with the launch of Go-Pay. The convenience of paying and tipping drivers via e-wallet has created a big, growing user base: half of Go-Jek’s 100 million monthly transactions are processed through Go-Pay.
The rise of fintech is anticipated to spice up Indonesia’s economy in the long run and speed up its transition to upper middle-income status. But it could also shake up the country’s banking sector along the way in which.
“We believe that in the long term, fintech companies will take over some of the banking business, both in existing and potential segments that could be acquired by banks,” Morgan Stanley says.
A July report by PwC Indonesia found that the majority Indonesian bankers surveyed feel threatened by Go-Pay and Alipay, an Alibaba-owned company.
Meanwhile, some banks are already embracing partnerships with digital firms. CIMB Niaga Bank signed up 940,000 recent customers by opening recent accounts for Go-Jek and Grab drivers – most of whom previously had no checking account.
Lani Darmawan, head of retail banking at CIMB Niaga, said it processes 2 million transactions from drivers every month.
“We believe that Go-Pay is a bridge for the unbanked to reach the formal financial sector. For some of our partners — drivers and merchants — partnering with us is the first step into the formal financial sector,” Go-Pay CEO Aldi Haryopratomo told Nikkei in an email.
“We also plan to cooperate more intensively with recognized financial institutions,” he added.
