Who doesn’t love electronic transaction? Even maybe your granny would love it if she has a smartphone and her favorite groceries store provide the service. Yes, electronic payment, which also often called as cashless payment/cashless transaction has been a big hit for the last several years worldwide.
Of course, we also understood that this kind of transaction is not a debit or credit card payment, which practically also cashless since you only have to swipe your card. A payment system that now we talk about including the ability to pay without a wallet, card, even a smartphone for several provider and occasion. Technological advancement on financial system has brought us to a new paradigm to see what a transaction should be: transparent, accountable, and recorded. Fortunately, all those three seems fulfilled by now and the policy makers hope it increases customers satisfaction.
Welcome to the age of the new cashless transaction where it is currently happening all around the world. Indonesia?
Now, so many runners can run freely without bringing to many pieces of stuff. The cyclist as well. Commuters who often use motorcycle ride-hailing phone service, such as GoJek, pay more efficient with GoPay. Recently, all toll road users in Indonesia have to use electronic money to pay their trip, so it’s also a form of cashless transaction. I have to remark that now we are already on the same age (or a bit less) compared with developed countries regarding the cashless transaction. What worries me a bit is, Indonesia is on the wrong track to grow, and it might be a time bomb for credibility, accountability, and transparency of our financial system.
Our ancestors use so many commodities for which depends on their need and trends. Money invented as a universal commodity of payment that should be acceptable for any purchases. In age, when money is not ‘physically there,’ the concept of money is still the same since we have benefited from that including easiness of transaction, satisfaction, etc. This includes another ‘definition’ of money, wherein my terms I would love to interpret as “an asset that recorded by professional authority.” This means money can be anything, with the same currency power; it can be a card, chip, software, or anything. One thing that we have to be sure is, if we want to bring out another form of money, we have to make sure that customers have benefit and explanation from it.
And fortunately, it happens to many. Most modern people nowadays seem to understand why they have to put some money on their tram or subway card. They get a more convenient payment system, and it’s not only from customers perspective: When the transportation system managed by a company, they can lead a flexible tariff quickly without too many external interventions. Let say; a private subway company creates a new algorithm for their fare only during Independence Day. It is easier to do when they have their system rather than using someone else, right? With this, again, customers gain another intangible benefit from financial technology.
But, what if we have to use ‘another form of money’ without a real benefit from it? That’s the recent case from Indonesian toll road payment policy. As explained before, our government recently instructed that every toll road transaction have to use e-money, a card provided by banks that contain money on it. We have less flexibility to choose the payment method into only tapping the card to . The government, as explained by the president itself, Joko Widodo, expect that this electronic payment can reduce queuing time on toll gate, increasing transparency, and catching up with the more-modern neighborhood such as Malaysia and Singapore. In fact, after several months of trial, The Indonesian Consumer Foundation (YLKI) stated that the expected benefit is not there yet. Furthermore, we have to remember that e-money is not the same card as your debit card, so people have to top up the card from ATM or a store nearby, where sometimes have different policy and ability: some store can, some other cannot. The same things go to ATM. With this, it is clear that the problem is not only about technological smoothness but also the fact that end-to-end system is not ready yet.
Developed by Private
To develop a good nation in this modern days, it is hard to restrict contribution from sector. Not only them, but also start-up company that has massive power from crowdfunding, venture capital, or whatever. They are part of our society, and with an excellent willingness to create a better future, they should always deserve a chance to contribute.
The problem from this will only occur when they later have too big power to handle or when the state has less superiority to them regarding control and policy. I hate to say but this is what happens in Indonesia now.
Although Indonesia is a country that has most considerable prospect on economic development that having four state-owned banks with total assets not less than USD 170 billion, none of them provide a real cashless transaction like the world use nowadays. Until now, those banks not even can create a debit card that can be used for ‘tap-to-pay’ transaction, which makes us, sometimes, feeling useless to have another card like e-money. Can you imagine that you have to open your bank account in ATM, transfer some money to another e-money card (which provided by them as well), and then use the e-money card for a purchase in a nearby department store for groceries? For some people, this means nothing since it only means that you have to hold another card in your wallet, but this also means a lack of innovation and inefficient process that not looking up to customer point of view.
Then, who provides them in Indonesia? Believe it or not: The start-ups and the privates.
People seem do not really care about who provide the services as long as they can feel the ‘technology.’ Who can deny when an advancement comes to your life with such as discount in each transaction (compared to cash payment)? There are several start-ups and companies that are successfully implementing this cashless transaction in their system to our habit, including Go-Jek with its GoPay, Grab with its GrabPay, and Telkomsel with its . All those are not e-money since they do not offer services by using a card: their service is a real cashless transaction for products they can provide, which mostly their own products.
The primary If start-ups can, why state-owned banks cannot?
A year ago, Indonesian Central Bank (BI) launched the Bank Indonesia Fintech Office as a media for assessment, risk mitigation, research initiator, and evaluation about business models of products and services from industry. We can see this as a serious response from the government to control the industry. However, nothing seems really improving for the last year. There are some serious problems buried under this slow improvement, and in my personal opinion, it seems too late to control.
We have to look up who needs that cashless transaction facility. For example, the one who needs GoPay is them who use Go-Jek products. People who do not want to have any transaction with Go-Jek products have a minimal probability using GoPay. The same things also go to GrabPay and , and here is the problem: every producer can create their own transaction platform for their own business and needs, which means instead of promoting technology for all it’s more like pushing their own business with incentives. If this condition not controlled wisely from now, more producer will follow what GoPay has achieved, which will lead to more ‘accounts’, more data shared to privates, more application on your phone, and it all do not bring any efficiency because you still have to transfer your money from bank account to those ‘accounts’.
If our banks can provide this services as European banks do, then normally we do not need to put money/top-up to our GoPay account, and that’s what standard banking transaction should be. You put your money on the bank, so if you want to use it, you just have to go to the bank and use it, not go to the bank, put it to another ‘account,’ and then use it.
It is impossible now to shut down the start-ups and privates on their cashless transactions development business. unwise country will establish a policy that may turn it all off and create a new one from government-side to monopolize the market. The most important thing to do now is pushing those banks to be more innovative, creative, and compelling than those start-ups since retail sector holds a significant position If we fail, no wonder we fail to promote financial technology to our own people, and they keep stagnant there without knowing what has been growing outside.
We already gave in so many data to Google, Facebook, our emails, and others from . Why should I remind you about giving another data to such ‘accounts’?