Indonesia’s Future: Cashless Society

Imagine a future, not so far away, where every financial action you need to do is processed digitally. No physical money and no burdens. Cashless, seamless, and effortless in your day-to-day activities.

Calvin Holyson
Jul 4 · 4 min read

The scenario above may sound like something that is too good to be true. It may be too good, but it is true. The reality of a ‘Cashless Society’ is approaching real fast (whether you like it or not).

“What does it mean exactly, a cashless society?”

A cashless society is a state where financial transactions are not processed with physical money, but through the transfer of digital information. We understand it better as a movement in which cash is replaced by a digital form as a better alternative. To put it simply, society exchanges money only in digital form. This leads to what we know as the newly popular digital payment method.

“How is the current situation on cashless society?”

First, you should know that the motion to introduce cashless society in Indonesia has actually started from quite some time ago.

Let us take a look at the past, specifically to the year 2014, when Uber, an American online-transportation company, launched their mobile application in Indonesia with credit cards as their only payment method option. This was Uber’s highly-valued feature which, unfortunately, was under-appreciated by the people of Indonesia.

Long story short, Uber failed to convince the people to shift themselves to a cashless payment. They had to give up their value and revert to accepting cash payments.

What went wrong here?

Indonesia faces the same problem as other developing countries, which is the lack of consensus towards cashless payment methods.

During the year of 2017, card payments and other forms of cashless payments, such as mobile wallets, only make up for a small percentage of overall payment methods used in Indonesia, even though they promise an easy and smooth experience.

Indonesia was unable to accept cashless payment methods due to these reasons:

1) Lack of technological support

2) Lack of concept education

Now, let us fast-forward to the present year of 2019. Indonesia has grown quite significantly in terms of technology acceptance, thanks to the smartphone boom. According to Tempo, Indonesia has done well in regards of mobile phone adoption; 91 percent of the population now owns a mobile phone, out of which 67 percent are smartphones.

With that understanding, it is now only a matter of how the stakeholders will lead and educate the people of Indonesia to go cashless.

“How will this impact my life?”

People used to go out to shop in malls, eat out at restaurants, or even pay their taxes using cash. This generally means that they have to walk the extra mile just to find an ATM and withdraw cash. They do this not because of preference, but because of necessity. There was no other “simple and clean” alternative to choose.

But now, the provided technologies are more than capable to support cashless payment methods.

Talking about a cashless society is not a matter of ‘if’ it is going to happen. This is not even a matter of ‘when’ it is going to happen. It’s here, it’s happening, and it will continue to happen. The movement to be a cashless society is happening progressively in Indonesia — with Financial Technology businesses and institutions as the spearhead.

Go-Pay, OVO, DANA, and many more others in the Financial Technology industry are on the rise, and are progressively penetrating through the market. Attractive promotions are thrown around and it just keeps looking better each day.

However, this is not just about the promotions. The impressive technology used, along with the proven security of the applications have provided people with a convenience that is highly valued. People are loving the experience, and it clearly shows.

Each day, the number of people who transition to cashless payment methods are raising exponentially, which consequentially raises the number of cashless transactions. Take a look at DANA, for example, who has gained 15 million users as of April 2019 and a count of 1 million transactions daily.

With the way things are going, financial analysts and professionals are forecasting that Indonesia may very well be following the footsteps of China, where third-party payment providers such as Alipay have seemingly replaced cash as the main exchange tool.

“So, what should I do?”

Indonesia is on the fast-track to becoming a cashless society. People are having their first-hand experience on cashless transactions, and they are apparently appreciating it. The potential benefits of going cashless far outweigh the risks that come with it. So at this point, the best advice would be to surf along rather than to be swept away by the waves.

It is a new day and age that may be too good to be true, but good and bad is always dependent on each individual. Position yourself to benefit from the good, and reduce the risks of the bad in the cashless society situation.

Dialogue & Discourse

News and ideas worth talking about. Fundamentally informative and intelligently analytical.

Calvin Holyson

Written by

Firm believer in dualities.

Dialogue & Discourse

News and ideas worth talking about. Fundamentally informative and intelligently analytical.

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