Indonesia is among the top drivers of e-money growth in Southeast Asia alongside neighbouring Malaysia, Singapore, the Philippines and Thailand, an inaugural report commissioned by Standard and Poor’s (S&P) Global Market Intelligence said.
The 2019 Southeast Asia E-Money Market report finds that the number of e-money transactions in the region increased by more than 31 per cent last year, with Indonesia and the Philippines showing the greatest growth potential for non-bank e-wallets.
E-money dethrones debit and credit cards as the reigning payment method in Southeast Asia, with more than 10 billion aggregate transactions last year, the report said.
Of the more than 10 billion e-money transactions in Southeast Asia last year, 34 per cent occurred in Singapore – making it the largest hub of cashless transactions in the region.
The number of cashless transactions in Indonesia rose to more than two billion last year, accounting for around 20 per cent of the total 10 billion transactions in Southeast Asia.
Furthermore, the report shows that the popularity of non-bank e-wallets such as the ones offered by ride-hailing app companies Grab and Gojek has bolstered the growth of ride-hailing and e-commerce in the region.
“E-wallets aligned with high frequency and scalable use cases like ride-hailing and e-commerce are likely to grow and garner market share across the region,” S&P Global Market Intelligence fintech analyst Sampath Sharma Nariyanuri in a statement.
“The volume of transactions processed through e-wallets is gaining steam. For example, we estimate that e-wallets’ share of total e-money volume in Indonesia grew to 36 per cent last year from less than 10 per cent in 2017.”
The growing chasm between the high availability of smartphones and unbanked population in cash economies such as Indonesia and the Philippines creates strong potential for e-wallet uptake, according to the report.
THE JAKARTA POST/ASIA NEWS NETWORK