E-Commerce Transactions Predicted to Jump 33%, Paylater is in Demand
Bank Indonesia (BI) estimates that e-commerce transactions will increase by 33.2% to IDR 337 trillion this year. Meanwhile, two studies show that payments in installments or Dpaylater continue to increase, including in Indonesia. The central bank predicts e-commerce transactions of IDR 205.5 trillion in 2019 and IDR 253 trillion last year. Meanwhile, this year it is predicted that IDR 337 trillion.
The surge in e-commerce transactions has also boosted the use of bank digital services. BI estimates that the value is IDR 27,036 trillion last year and IDR 32,206 trillion in 2021. The global fraud management technology company, GBG said, the paylater feature is one of the preferred payment options for digital consumers globally. Only, GBG does not specify the percentage.
Managing Director of APAC GBG Dev Dhiman only said that the e-commerce platform and financial technology (fintech) developed this feature because it provided flexibility for users. “Paylater has disrupted the loan service landscape,” he said in a press release, Thursday (21/1).
Paylater will be the Prima Donna in 2021
Research firm Coherent Market Insights also predicts the paylater feature to be excellent in Indonesia in 2021. Based on an internal study, the global market for paylater services is predicted to grow from US$ 5 million in 2019 to USD 33.6 million in 2027. The average annual growth rate is 21.2%.
The same thing was conveyed by Kredivo CEO Umang Rustagi. “We are also trying to provide the lowest interest rates and expand service coverage, both in terms of merchants and areas,” he said in a press release, Tuesday (19/1).
The e-commerce company, Tokopedia, also recorded a two-fold increase in transactions using paylater services during the corona pandemic or last year. Tokopedia Marina Ivana Tjuanda’s Senior Lead Business Development (Fintech) assessed that this was because there was a need for payment in installments when income fell due to Covid-19.
Up to date, Tokopedia has collaborated with various fintech such as Kredivo and Taralite to provide paylaters. Taralite was acquired by OVO in March 2019. Last year, the company also partnered with Indodana to provide loans of up to IDR 25 million.
This collaboration expands as the demand for paylater services increases. GoPay also recorded a 2.7-fold increase in transactions on the paylater feature in 2020. The parent company, Gojek, collaborated with PT Mapan Global Reksa (Findaya) to provide this installment feature.
Kredivo is Confident Paylater Products will Become a Trend, Beat Credit Cards
Financing company PT FinAccel Finance Indonesia or Kredivo is optimistic that the phenomenon of the buy now, pay later (BNPL) concept will continue to be excellent in Indonesian society. Umang Rustagi the CEO of Kredivo explained that the popularity of Paylater products in Indonesia is also driven by the trend of digital transactions which continue to grow.
Umang added that the implementation and driving factors for the adoption of the buy now pay later concept for shopping in countries like Indonesia are quite different from those in developed countries. It is also an option even though they have a credit card.
However, the popularity of e-commerce and digital transactions, as well as the low penetration of credit cards in Indonesia, have made Paylater the door for people to access guaranteed credit. “This can be seen through internal research which shows that 60% of our users get their first credit through Kredivo,” he said.
the digital financial industry in Indonesia continues to be overshadowed by low financial literacy and inclusion despite having high commercial opportunities, especially among the underbanked.
It is believed that paylater products will be able to contribute to increase the financial inclusion in Indonesia by presenting various financial product innovations in quickly, easily and affordably.