Abstract
Indonesia is an archipelago country with more than 270 million inhabitants spread across urban and rural regions. This makes digital payment penetration a challenge in itself. Private and government e-wallet service providers have sought to increase the use of cashless services to address structural deficiencies in the country’s economy, such as poor financial inclusion and heavy reliance on manual remittances. This study discusses penetration problems that occur in the e-wallet industry and formulates the strategy so that the use of digital payment platforms can be carried out evenly in all regions of Indonesia. This study notes that technology enablement such as smartphone and internet penetration does not correlate with e-wallet penetration. Many underlying factors affect the penetration, such as key driving forces, infrastructure readiness, and people’s perception of the safety and security of mobile transactions. Bank Indonesia and e-wallet providers are responsible to educate people about the advantages along with possible risks of adopting e-wallet as a non-cash payment method.
Highlights
Indonesia is the fourth most populated country in the world, dominated by young people with an average age of 31 years old
The primary study aims to validate challenges of digital payment adoption in Indonesia provided by Azali (2016), use descriptive data to support the analysis
This study discovered insights from representatives of four prominent e-wallet providers in Indonesia
Summary
Indonesia is the fourth most populated country in the world, dominated by young people with an average age of 31 years old. Indonesia has a very significant growth in internet and smartphone users, ensuring Indonesia's position as one of the countries with the largest digital base in the world. Despite having a lot of economic potentials, Indonesia faces many challenges, one of which is financial inclusion as a supporting factor for economic growth. Compared to other Southeast Asian countries, Indonesia still relies a lot on manual remittances. Indonesia has unequal access to banking, creating unequal access to finance both in urban and rural areas
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