How LinkAja Might Win ?

LinkAja has officially grand-launched last June. It represents collective efforts of Indonesian BUMN (state-owned enterprise) to gain market share in emerging digital payment space. Clashing with the likes of Gojek, Grab-backed OVO and Alibaba-backed DANA.

Images from LinkAja.id

Things are not starting smoothly for them. The grand launch has been delayed couple of times due to technical issues, experts doubts their agility to compete and they’ve slouched to 4th place below DANA. Even though a year ago, T-Cash was fighting head to head with OVO to gain 2nd place.

So whats the move going forward ? Heres my quick thoughts on how LinkAja can win

Non-Smartphone Features

Gopay, Ovo and DANA all require smartphone to use. On the other hand, telco-based wallet such as T-Cash can be operated from dumb phones using USSD command. LinkAja can leverage this to offer more inclusive experience.

To process payments, user can just provide their mobile phone and approve payment via sms-delivered OTP. This could be beneficial to push LinkAja usage in rural areas where mobile internet coverage is spotty.

Digitizing Government Payments

In my experience, government payments are mostly in cash. From paying traffic fines, renewing your driver license or paying annual vehicle tax, LinkAja could be leveraged to make all of this cashless. Toll-road, Commuter Line and TransJakarta has been successfully converted to 100 percent cashless hence its not impossible to expand this into any sort of government payments.

For government institutions, cashless payments could make their payment processing more efficient and reduce fraud as well. This could be incentives for policy makers or public institution leaders to push LinkAja adoption in their organization. LinkAja could capitalize this putting registration and cash-in booth on every government institution that accept cash payment.

Leveraging Combined User Base

LinkAja is an evolution T-Cash. Telkomsel has 100 million existing user base. There also four state banks backing LinkAja up : Bank Mandiri, BNI, BRI and BTN. The four combined (also known as HIMBARA) represented almost 200 million accounts. Not to mention user contribution from Pertamina and Jiwasraya.

As i mentioned in my previous article, massive user base dont mean much if there are no clear benefits for Telkomsel or HIMBARA to use LinkAja over other wallet provider.

Good example of this is initiative to link integrate current account to LinkAja balance. Hence if you are one of HIMBARA bank users, you dont have to constantly top up, just link your account and LinkAja app could substitute your card as payment method.

Another ideas might be to use LinkAja as easier method to do peer to peer transfer. User can transfer money from any of HIMBARA bank to any mobile phone number since primary identifier for LinkAja (0r any other wallet) is mobile number.

Loyalty points is another angle that state owned enterprise could collaborate with LinkAja. Points from Telkomsel top-up, Pertamina petrol station, any payments from HIMBARA banks will be consolidated in LinkAja.

The key is to make the experience using LinkAja much much better for existing BUMN customer base compared to non-user. If its not, then LinkAja would not have advantage over other big 3 wallet provider no matter how many state enterprises backing them up.

Investing : Next Frontier in Indonesian Fintech ?

In current Indonesian context, when somebody talk about fintech they mostly refer to lending. In DailySocial surveys, more than half of respondent associated fintech with online lending services with payment as a close second. Number of fintech funding activities also skewed toward this direction with 60% of total 14 deals in 2018 went to P2P lending startups. If you browse through fintech list in OJK website, only P2P lending are listed even though insurance and investment fintech falls under OJK supervision. There are currently 113 registered lending fintech as of June, far more than any other types of fintech combined.

Two things from this: Indonesian fintech growth so far still contributed by lending thus other financial services is underutilized. This leaves lots of room to grow for fintech ecosystem going forward. Second, with lending companies already reach hundreds, fintech players need to think hard what will be the next play.

So what could be the next phase for Indonesian fintech ? my take is on investing. Of all the financial services, it is the least inclusive with less than 1% registered investors in a 270 million population. Number of investors has been growing double digits for four years straight and most of the growth are contributed from younger segments.

In this article, i wrote overview on investing landscape in Indonesia, challenges and how this sector has big potential to drive further fintech growth going forward.

Continue reading “Investing : Next Frontier in Indonesian Fintech ?”

Anticipating Facebook’s Libra

Yesterday, Facebook launched its own global currency called Libra. It is built on blockchain and it carries Facebook ambitious bet to redefine how money works in the internet (you can see it in this video). Theres lot of interesting aspects of Libra, from its underlying technology, the management model and privacey features. TechCrunch explain it beautifully in this 4000 words explainer.

Explainer of main use case of Libra. You can watch the video here

My key takeaways from Facebook Libra are these :

  1. Libra is crypto-based digital currency. It is a cryptocurrency hence decentralized, open and secure. However, unlike other cryptocurrency, it is blazingly fast (1000 TPS compared to 7 in Bitcoin and 15 in Ethereum) and financially stable due to the backings of real-money reserve. To use Libra, you will need Calibra, its digital wallet. You can cash-in, store, send and cash-out in Calibra similar to Paypal, Gopay, OVO and other digital wallet. However, Calibra will seamlessly handle multi-currency remittance, available around the world and integrated with FB Messenger and Whatsapp. Calibra itself is built by Facebook however since Libra is open infrastructure, in the future other companies might built other wallet apart from it.
  2. Libra is mainly targeting unbanked population. In the intro video, Libra is designed to be fast in Lagos, simple in Manila and convenient to send money to Mexico City. To use Libra and Calibra, user only need feature phone, internet and any kind of government-issued identification. It doesnt require smartphone hence highly inclusive. Libra also claimed to utilize blockchain to drasticly reduce fees.
  3. Libra is backed by lots of prominent organization. Apart from Facebook, Libra is supported by giants and whales of global institution. Visa, Mastercard, Paypal, Stripe are onboard. Theres also telco (Vodafone), venture capital (Andreesen-Horowits) and non-profits (Kiva and Mercy Corps). Full list of Libra backers can be read here.

This is an interesting slash scary things for fintech and crypto development going forward. If you work in wallet or digital money business, Facebook is eye-balling your lunch. Every penny that went into Calibra wallet is a penny less from other wallet. If youre in fintech focusing on unbanked, like me, this could be potential to do cashless financial service delivery. If you work in blockchain, Libra could be the key use case to bring the crypto to the masses. Global bitcoin users currently is 35 millions while Facebook itself has 2.3 billion userbase.

So considering this development, what can we do to anticipate? heres my initial thoughts :

Continue reading “Anticipating Facebook’s Libra”

Second Act : OVO Strategy to Expand Beyond Wallet

This is series of study case analysis that i like to write from time to time. I am a big fan of Ben Thompson’s Stratechery and these essays are inspired by Ben’s work. Check out my last post on LinkAja.

On second week of April, Dealstreetasia broke the news that Indonesian payment wallet provider OVO has acquired online mutual fund startups, Bareksa, for 20 mio USD. This news came just merely a month after OVO acquisition of P2P Platform Taralite. Taralite acquisition has enabled OVO to offer credit-card-like Paylater which at the moment only available in Tokopedia. Bareksa on the other was used to power OVO Invest feature which can be accessed after user do advanced KYC by submitting their E-KTP.

Image result for ovo transaksi
Seeking information in OVO customer service booth. Pic credit from Metropolitan.id

As a country with massive unbanked population and asymmetric banking industry , Indonesia is a lucrative ground for fintech. These recent developments is a clear attempt to expand into wider financial services and having Lippo and Grab as their backer, OVO have ample warchest to start landgrab in multiple fronts.

In this essay, i will share my analysis on rationale, challenge and predictions on OVO next step in Indonesia financial industry.

Continue reading “Second Act : OVO Strategy to Expand Beyond Wallet”

The Curious Case of T-Cash

This is series of study case analysis that i like to write from time to time. Check out my first post on Traveloka.

This week in fintech, state-owned e-wallet provider T-CASH announced that they will transform into LinkAja. Not only the name change, the new T-Cash will be backed not only by Telkom group but also six other state-owned enterprise (SOEs) : Bank Mandiri, BRI, BNI, BTN, Jiwasraya and Pertamina. The change will be implemented late February and current T-Cash users will only need to update their app once LinkAja launched.

T-cash QR Payment feature. image credit from kanalaceh.com

Couple of interesting points from this.

Continue reading “The Curious Case of T-Cash”

Apa yang dicari para investor dalam pendiri startup?

Ini adalah thread quorayang saya jawab beberapa waktu lalu. Platform Quora ini cukup menyenangkan dan saya aktif disana. Cek kesini untuk melihat semua jawaban yang saya tulis.


Skena dari film The Founder dimana Michael Keaton memerankan Ray Kroc

Di satu konferensi, saya berkesempatan mengobrol dengan Pak Jefrey Joe dari Alpha JWC Venture. Seorang venture kapitalis yang portfolionya bisa dilihat dilink dibawah

Portfolio | Alpha JWC Ventures

Pertanyaan saya senada dengan ini :

“ Bagaimana menilai probabilitas kesuksesan seorang founder, terutama jika startupnya masih early sekali “

Continue reading “Apa yang dicari para investor dalam pendiri startup?”

Mengapa saat ini di Indonesia, startup fintech lebih banyak dibanding startup lain

Ini sebenarnya adalah thread Quora yang saya jawab beberapa waktu lalu Karena responsnya cukup bagus, saya menambahkan beberapa materi dan memposting ulang disini.

Platform Quora ini cukup menyenangkan dan saya aktif disana. Cek kesini 
untuk melihat semua jawaban yang saya tulis.

Image result for fintech indonesia
Lanskap fintech di Indonesia. Gambar dari Convergence Ventures
Continue reading “Mengapa saat ini di Indonesia, startup fintech lebih banyak dibanding startup lain”