In recent years, payment trends have evolved tremendously, bringing forth a plethora of payment options that simplify transactions for customers. One such popular option is the e-wallet, or digital wallet.
E-wallets are among Indonesia’s most popular and most rapidly growing payment methods. In fact, 9 out of 10 people aged 25-35 actively use e-wallets, with a user growth rate of over 300% since the beginning of 2021. E-wallet transactions are also predicted to continue on their upward trajectory, potentially reaching Rp1,000 trillion (US$70b) by 2025.
What are e-wallets, and what are the benefits of providing this payment option? Read on for a detailed explanation!
What are e-wallets (also known as digital wallets)?
E-wallets are digital tools or platforms that enable users to store money, conduct transactions, and manage their finances via mobile devices like smartphones or tablets.
Because their functionality mirrors that of conventional physical wallets, e-wallets are also commonly referred to as digital wallets.
E-Wallets are also often used as an alternative to cash and credit cards in various activities. Customers can use e-wallets to shop at brick-and-mortar stores and online platforms, pay bills, transfer money, and even invest. All of these can be accomplished swiftly and simply with just a few taps on their devices.
How do e-wallets work?
E-wallets operate by merging digital technology with financial infrastructure, like payment gateways, to enable secure and efficient financial transactions.
Here is an overview of how e-wallets work:
1. Register
Users can register by downloading their preferred e-wallet application and filling in their personal data. Once the information has been verified, they’ll be able to use the e-wallet.
2. Top up the balance
Users can top up their balance by transferring funds into their e-wallet account.
3. Perform transactions
Once the balance is topped up, users can make purchases at both brick-and-mortar and online stores using QR scans or payment links.
4. Monitor transactions
Users can view their transaction history, including both successful and failed transactions, within their e-wallet app. Business owners can also track the funds received after each completed transaction through their financial dashboard.
Examples of e-wallets in Indonesia
Here are some e-wallets that are particularly popular among Indonesians:
Launched in 2017 by the Emtek Group, DANA has served as the official payment partner for major events in Indonesia, including the 2018 Asian Games and the 2019 SEA Games, illustrating the significant trust placed in this e-wallet for reliable and efficient payment services. DANA has since experienced rapid growth and is now among the leading e-wallets in Indonesia.
OVO is a subsidiary of Lippo Group that focuses on developing digital financial technology. OVO features a points program that allows users to accumulate points with each transaction. These points can be redeemed for various enticing rewards, like discounts, cashback, and exclusive products.
LinkAja is a collaboration between several major banks in Indonesia, namely Bank Mandiri, BRI, BNI, and Telkomsel. This e-wallet was launched in 2019 with the aim of creating digital payment solutions that are inclusive and accessible to all segments of Indonesian society.
ShopeePay is an e-wallet developed by Shopee, one of the largest e-commerce platforms in Southeast Asia. ShopeePay collaborates with various strategic partners, including fast food restaurants, movie theaters, and leading retail stores in Indonesia. ShopeePay users can enjoy various promos and special offers when making payments using this e-wallet.
AstraPay is an e-wallet developed by Astra Digital, a subsidiary of Astra International. AstraPay offers not only digital payment services, but also enables users to purchase products from the Astra Group online.
Jenius Pay is an e-wallet feature developed by Bank BTPN to complement their digital banking services. One of Jenius Pay’s standout features is the “Split Bill” option, which allows users to split bills with their friends in a single transaction.
How your business benefits from offering e-wallet as a payment method
Now that you understand know what e-wallets are, how they operate, and some of the popular e-wallets in Indonesia, it might be the right time for you to consider integrating this payment option into your business.
Here are some ways in which your business can benefit from providing e-wallet as a payment option to your customers:
- Customer convenience and satisfaction
By integrating e-wallet as a payment method, you’re enabling a convenient payment method for your customers. Whether they’re shopping online or at your physical store, customers can conduct transactions swiftly and effortlessly using their e-wallet apps.
- Potential for increased sales
As more consumers, particularly millennials and Gen Z, opt for cashless transactions, offering e-wallet payments can potentially boost your sales conversions and expand your customer base by catering to their payment preferences.
- Secure transactions
E-wallets ensure a high degree of security for transactions. The use of advanced encryption technologies and stringent security protocols helps safeguard customer data and financial information, giving customers peace of mind and fostering trust in doing business with you.
- Better financial management
E-wallets can streamline your business’ financial management. Transactions conducted through e-wallets are automatically recorded in the system, facilitating easier financial monitoring and reporting. This enables you to track daily, weekly, or monthly revenue, and manage payments and repayments more efficiently.
- Promotional offers
You can offer loyalty programs, cashback, or special discounts to customers who use e-wallets in their transactions. This helps improve customer retention and motivates customers to continue making purchases patronizing your business.
Providing e-wallet as a payment method
Taking e-Wallet payments to the next level with Xendit
With Xendit, you can provide e-wallet payment solutions that not only cover one-time payments but also include unique features such as tokenization and subscription, which are not commonly found with other payment gateways
You may be wondering–what are the differences between these three types of transactions and how do they benefit your business?
- One-time payment
One-time payments encompass standard e-wallet payments. Customers pay in accordance with the transaction amount using their e-wallet of choice.
This payment option is perfect for any business seeking to facilitate digital transactions for their customers.
- Tokenization
Tokenization via e-wallet means customers no longer need to enter their phone number, OTP, or PIN for each transaction. Instead, customers only need to authorize and link their accounts once prior to the first transaction.
For subsequent transactions, customers only need to input their PIN, or they can even bypass this process if the auto-debit option has been activated. This approach is more streamlined and undeniably more convenient for customers.
Xendit stands out as the only payment gateway in Indonesia offering e-wallet tokenization for DANA, OVO, ShopeePay, and Link Aja.
- Subscription
For businesses with a subscription model, providing this payment service can be quite beneficial.
Subscription payments have traditionally depended on credit cards, yet the prevalence of credit card usage in Indonesia remains quite low. Subscription payments via e-wallets presents a chance for you to reach a broader customer base that doesn’t own credit cards.
With Xendit’s subscriptions feature, you can enhance customers’ payment success rates as customers can set up automatic recurring payments with just a one-time account-linking at the beginning of the payment process.
How to provide e-wallet payment methods through Xendit?
Knowing the advantages and special features of e-wallet payments via Xendit, it’s high time you got these services up and running!
Just follow these simple steps to start offering this payment method:
- Register and fill up the required data
- In parallel, integrate via the following links
- Once your account is active, you can start accepting payments. All transactions will be automatically logged on the Xendit dashboard.
- After the settlement period, you can withdraw funds.
- You can manage transactions and reconciliations easily through the reporting feature available on the dashboard.
Should you encounter any difficulties in registering or integrating our payment methods, feel free to contact our dedicated customer success team, who are ready to help you 24/7!
