LinkAja Speeds Up MSME Digital Payment Adoption of Indonesian MSMEs Through the Use of E-Wallets

Since the pandemic took place in early 2020, online payment systems or mobile payments have become an alternative payment that is increasingly used by Indonesians as face-to-face transactions are reduced which automatically reduces the use of cash. In order to support the adoption of e-wallet usage, especially for MSME players, LinkAja as one of the digital financial services in Indonesia collaborated with DealStreetAsia - a Singapore-based media company, to conduct research on Indonesia's mobile digital payment usage in 2022.

According to the e-conomy SEA 2021 research released by Google, Temasek, and Bain & Co, 1 in 3 merchants in Southeast Asia admitted that without a digital platform, they would not be able to maintain business operations during the pandemic. In the research, it was also mentioned that many merchants have felt the positive impact of the application of digital platforms - especially in terms of increased business opportunities. Therefore, the application of digital platforms, especially in terms of payments, will increasingly be found in merchants - including MSMEs. 

Based on the results of the 'Indonesia Mobile Payment Review 2022' research conducted on MSME business actors who run their businesses offline, 97% of respondents surveyed have used at least one e-wallet service and more than half of offline merchants - to be precise, 56% of e-wallet users have just started using e-wallets for the first time during the pandemic. In terms of the increasing adoption of mobile payments among average Indonesians, 76% of respondents agreed that having an e-wallet as a means to process transactions is increasingly important for MSME businesses. Other research findings show that while cash is still the main payment method, digital payments are increasingly becoming the most popular payment alternative, with e-wallets being the most popular non-cash payment alternative among MSMEs. This can be seen from the 23% of respondents who said that they serve digital transactions through e-wallets from their customers every day, of which the portion of payments via bank transfers is 9% while the portion of payments via debit cards and cash is 5%.

Reza Ari Wibowo, LinkAja's Chief of Finance & Strategy Officer explained LinkAja's strategy for 2022 through a 2-sided business model on the B2C or Customer to Merchant ("C2M") and B2B or Merchant to Merchant ("M2M") sides, which will increase the company's profitability, including on the C2M side through low cost users and profitable use-cases, and on the M2M side through a focus on digital and traditional supply chains, especially in the BUMN ecosystem. In the traditional ecosystem, LinkAja has been educating and activating MSMEs. In 2021, LinkAja managed to record an increase in QRIS performance, namely a 600% increase in users and a 280% increase in merchants.

"LinkAja also continues to collaborate with state-owned companies to digitize the ecosystem supply chain by providing financial services (payments and financing), as well as being a provider of digital products for MSME players. For example, LinkAja has digitized more than 300,000 credit stalls in Telkomsel's traditional ecosystem. This supply chain digitization will be replicated to SOE ecosystems such as building stores, LPG agents, and others. By collaborating with LinkAja, MSME players will get benefits such as increasing sales, simplifying cash handling, getting direct payments from buyers without cash deposits, and monitoring their business performance," he said.

Andi Haswidi, Head of Research ASEAN from DealStreetAsia said "The research conducted provides a lot of important input for the wider adoption of e-wallets in Indonesia, especially among MSMEs, because we can see the potential for e-wallet adoption as one of the payment methods for these MSME players. In addition, we can also see whether the use of e-payment transactions becomes more routine, and see the development of the adoption of QRIS usage in LinkAja considering that QRIS is also one of the important agendas that LinkAja continues to support".

Through a complete and integrated ecosystem of electronic financial transaction services, LinkAja's consistency and commitment in its efforts towards #SatukanPotentialIndonesia is increasingly being realized. By optimizing all the services offered by each SOE, LinkAja is optimistic that it can meet the needs of safe and convenient digital transactions, and further accelerate the process of equitable financial inclusion in Indonesia.