The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021 - Product Image

The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021

  • ID: 4370738
  • Report
  • Region: Indonesia
  • 61 pages
  • GlobalData
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FEATURED COMPANIES

  • American Express
  • Bank Central Asia
  • Bank Danamon
  • Bank Mandiri
  • Bank Mega
  • Bank Negara Indonesia
  • MORE
The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021

Summary

Cash was the predominant payment instrument during the review period (2012-16), especially among the rural population, with cash accounting for 98.6% of the total volume of payments in 2016. This was primarily due to low awareness of electronic payments, a high unbanked population, and limited access to banking infrastructure. As the government and banks have taken initiatives to bring the unbanked population into the formal banking system, payment cards have gradually become more accepted. Payment card use consequently grew during the review-period at a CAGR of 13.9% in terms of volume of transactions.

Pay-later card market in Indonesia is still in the developmental phase, with penetration of only 6.8 per 100 individuals in 2016. Strict government regulation with regard to credit card eligibility remains one of the major reasons for the low penetration. Mounting card debt among consumers forced the central bank to introduce a regulation, effective since January 2015, according to which individuals with an annual income of less than $222 (IDR3m) are now eligible for just one credit card, while individuals with an annual income between $222 (IDR3m) and $740 (IDR10m) are eligible to possess credit cards from two issuers only.

Indonesian e-commerce market rose from $1.2bn (IDR16.6tn) in 2012 to $7.6bn (IDR102.9tn) in 2016. Factors affecting the growth of ecommerce include a growing young population, the increasing presence of online retailers, a broader range of payment methods, and rising customer confidence in e-commerce transactions. Growth has further been supported by strong investments from the private sector.

Traditional payment methods such as credit transfers and cards remain the preferred mode of e-commerce payments in Indonesia, collectively accounting for 66.9% of the total e-commerce transaction value in 2016. Alternative payments such as digital and mobile wallets and carrier billing are also gradually gaining prominence in Indonesia, accounting for 6.8% of the total transaction value in 2016. This is an increase from 3.1% in 2012.

The report "The Cards and Payments Industry in Indonesia: Emerging trends and opportunities to 2021" provides detailed analysis of market trends in the Indonesian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including cash, cheques, and payment cards during the review-period (2012-16).

In particular, this report provides the following analysis -
  • Current and forecast values for each market in the Indonesian cards and payments industry, including debit, credit and charge cards.
  • Detailed insights into payment instruments including cash, cheques, and payment cards. It also, includes an overview of the country's key alternative payment instruments.
  • E-commerce market analysis and payment methods.
  • Analysis of various market drivers and regulations governing the Indonesian cards and payments industry.
  • Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards.
Companies mentioned in this report: Bank Rakyat Indonesia, Bank Negara Indonesia, Bank Central Asia, Bank Mandiri, Bank Danamon, CIMB Niaga, Bank Mega, Visa, Mastercard, American Express, JCB.

Scope
  • Bank Indonesia, the country’s central bank, is enhancing the security of payment systems in order to build customer confidence in payment cards. In this regard, the government has mandated the migration of all payment cards to EMV standards by December 31, 2021. Similarly, as of July 1, 2017 the central bank has mandated the adoption of six-digit PINs for debit and ATM cards, instead of four-digit PINs.
  • Up until February 2016, the e-commerce market was in the government’s “Negative Investment” list - and thereby foreign investors were not allowed to invest in local companies or set up a business. To boost investment in the domestic e-commerce market, the government introduced a new foreign direct investment policy in February 2016 allowing 100% foreign ownership of e-commerce companies for investments over $7.4m (IDR100bn), while for investments between $740,000 (IDR10bn) and $7.4m (IDR100bn), foreign ownership was capped at 49%. However, the former regulation was later revised in May 2016 to limit foreign ownership up to 49% in e-commerce companies.
  • Consumers in Indonesia are gradually adopting contactless payments. Consequently, Visa launched its contactless service Visa payWave in Indonesia in September 2016. This service enables Visa card holders to make contactless transactions without a PIN for transactions below $74.0 (IDR1m). Following this, Bank CIMB Niaga, Bank Tabungan Pensiunan Negara, UOB Indonesia, and Bank Mandiri adopted this technology.
Reasons to Buy
  • Make strategic business decisions, using top-level historic and forecast market data, related to the Indonesian cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in the Indonesian cards and payments industry.
  • Assess the competitive dynamics in the Indonesian cards and payments industry.
  • Gain insights into marketing strategies used for various card types in Indonesia.
  • Gain insights into key regulations governing the Indonesian cards and payments industry.
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Note: Product cover images may vary from those shown
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FEATURED COMPANIES

  • American Express
  • Bank Central Asia
  • Bank Danamon
  • Bank Mandiri
  • Bank Mega
  • Bank Negara Indonesia
  • MORE
EXECUTIVE SUMMARY
1.1. Market overview
1.3. Key facts
1.4. Top five industry events
2. PAYMENT INSTRUMENTS
2.1. Current payment environment
3. E-COMMERCE AND ALTERNATIVE PAYMENTS
3.1. E-commerce market analysis
3.3. Alternative payment solutions
3.3.1. PayPal
3.3.2. Sakuku
3.3.3. Mandiri e-Cash
3.3.4. Straight2Bank
3.3.5. Dompetku
3.3.6. XL-Tunai
3.3.7. TCASH
3.3.8. mVisa
3.3.9. DOKU
3.3.10. Fortumo
3.3.11. BBM Money
4. REGULATIONS IN THE CARDS AND PAYMENTS INDUSTRY
4.1. Regulatory framework
4.1.1. Regulations related to card issuers
4.1.2. Regulations related to credit cards
4.1.3. Electronic banking regulations
4.2. Anti-money laundering
4.3. Foreign direct investment regulations
5. ANALYSIS OF CARDS AND PAYMENTS INDUSTRY DRIVERS
6. PAYMENT CARDS
7. DEBIT CARDS
7.1. Debit cards market analysis
7.2. Competition in the debit card market
7.3. Debit card comparison
8. PAY-LATER CARDS
8.1. Pay-later card market analysis
8.2. Competition in the pay-later card market
8.3. Pay-later cards comparison
9. PREPAID CARDS
10. MERCHANT ACQUIRING
11. APPENDIX
11.1. Abbreviations and acronyms
11.2. Supplementary data
11.3. Definitions
11.4. Methodology
11.5. Bibliography
11.6. Further reading

List of Tables
Table 1: Indonesia: key facts, 2016
Table 2: Indonesia: regional benchmarking of payment cards, 2016
Table 3: Indonesia: mode of entry of foreign banks
Table 4: Indonesia: debit card comparison and key features, 2017
Table 5: Indonesia: gold credit cards comparison and key features, 2017
Table 6: Indonesia: premium credit cards comparison and key features, 2017
Table 7: Indonesia: charge cards comparison and key features, 2017
Table 8: Indonesia: payment instrument transaction values (IDRtn), 2012-16
Table 9: Indonesia: payment instrument transaction values ($bn), 2012-16
Table 10: Indonesia: payment instrument transaction volumes (millions), 2012-16
Table 11: Indonesia: payment cards in circulation by type (millions), 2012-21f
Table 12: Indonesia: volume of payment card transactions (millions), 2012-21f
Table 13: Indonesia: value of payment card transactions (IDRtn), 2012-21f
Table 14: Indonesia: value of payment card transactions ($bn), 2012-21f
Table 15: Indonesia: debit cards in circulation (millions), 2012-21f
Table 16: Indonesia: debit card transaction volumes, 2012-21f
Table 17: Indonesia: debit card transaction values (IDR), 2012-21f
Table 18: Indonesia: debit card transaction values ($), 2012-21f
Table 19: Indonesia: debit cards in circulation by scheme (millions), 2012-16
Table 20: Indonesia: debit card transaction values by scheme (IDRtn), 2012-16
Table 21: Indonesia: debit card transaction values by scheme ($bn), 2012-16
Table 22: Indonesia: debit card transaction values by issuer (IDRtn), 2012-16
Table 23: Indonesia: debit card transaction values by issuer ($bn), 2012-16
Table 24: Indonesia: pay-later cards in circulation (millions), 2012-21f
Table 25: Indonesia: pay-later card transaction volumes, 2012-21f
Table 26: Indonesia: pay-later card transaction values (IDR), 2012-21f
Table 27: Indonesia: pay-later card transaction values ($), 2012-21f
Table 28: Indonesia: pay-later cards in circulation by scheme (000s), 2012-16
Table 29: Indonesia: pay-later card transaction values by scheme (IDRtn), 2012-16
Table 30: Indonesia: pay-later card transaction values by scheme ($m), 2012-16
Table 31: Indonesia: pay-later card transaction values by issuer (IDRtn), 2012-16
Table 32: Indonesia: pay-later card transaction values by issuer ($m), 2012-16
Table 33: Indonesia: credit cards in circulation (millions), 2012-21f
Table 34: Indonesia: credit card transaction volumes, 2012-21f
Table 35: Indonesia: credit card transaction values (IDR), 2012-21f
Table 36: Indonesia: credit card transaction values ($), 2012-21f
Table 37: Indonesia: credit cards in circulation by scheme (000s), 2012-16
Table 38: Indonesia: credit card transaction values by scheme (IDRtn), 2012-16
Table 39: Indonesia: credit card transaction values by scheme ($m), 2012-16
Table 40: Indonesia: charge cards in circulation (000s), 2012-21f
Table 41: Indonesia: charge card transaction volumes, 2012-21f
Table 42: Indonesia: charge card transaction values (IDR), 2012-21f
Table 43: Indonesia: charge card transaction values ($), 2012-21f
Table 44: Indonesia: charge cards in circulation by scheme (000s), 2012-16
Table 45: Indonesia: charge card transaction values by scheme (IDRtn), 2012-16
Table 46: Indonesia: charge card transaction values by scheme ($m), 2012-16
Table 47: Indonesia: prepaid cards in circulation (millions), 2012-21f
Table 48: Indonesia: prepaid card transaction values (IDRtn), 2012-21f
Table 49: Indonesia: prepaid card transaction values ($m), 2012-21f
Table 50: Indonesia: merchant acquiring transaction volumes (millions), 2012-20f
Table 51: Indonesia: merchant acquiring transaction values (IDRtn), 2012-20f
Table 52: Indonesia: merchant acquiring transaction values ($bn), 2012-20f
Table 53: Indonesia: acquirers’ transaction volumes (millions), 2011-15
Table 54: Indonesia: acquirers’ transaction value (IDRtn), 2011-15
Table 55: Indonesia: acquirers’ transaction values ($bn), 2011-15
Table 56: Indonesia: retail outlets and card-accepting merchants (000s), 2012-20f
Table 57: Indonesia: debit card average interchange fees (%), 2011-15
Table 58: Indonesia: debit card merchant service charge and interchange fee (%), 2012-20f
Table 59: Indonesia: pay-later card average interchange fees (%), 2011-15
Table 60: Indonesia: pay-later card merchant service charge and interchange fee (%), 2012-20f
Table 61: Key definitions

List of Figures
Figure 1: Indonesia: payment instrument shares by transaction value (%), 2012 vs 2016
Figure 2: Indonesia: payment instrument shares by transaction volume (%), 2012 vs 2016
Figure 3: Indonesia: e-commerce market value
Figure 4: Indonesia: population and economic indicators
Figure 5: Indonesia: ATMs, POS terminals, and household consumption
Figure 6: Indonesia: payment cards transaction value and cards in circulation, 2012-21f
Figure 7: Indonesia: debit card penetration and turnover per card
Figure 8: Indonesia: debit card scheme and issuer transaction value shares, 2016
Figure 9: Indonesia: pay-later card penetration and turnover per card
Figure 10: Indonesia: pay-later card scheme and issuer transaction value shares, 2016
Figure 11: Indonesia: prepaid cards in circulation, and transaction value, 2012-21f
Figure 12: Indonesia: merchant acquiring transaction volume and value, 2012-20f
Figure 13: Indonesia: acquirers’ market share in terms of transaction volume and value (%), 2015
Figure 14: Indonesia: average merchant service charge and interchange fee (%), 2012-20f
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  • Bank Rakyat Indonesia
  • Bank Negara Indonesia
  • Bank Central Asia
  • Bank Mandiri
  • Bank Danamon
  • CIMB Niaga
  • Bank Mega
  • Visa
  • Mastercard
  • American Express
  • JCB
Note: Product cover images may vary from those shown
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Note: Product cover images may vary from those shown
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