Telekomunikasi Indonesia, Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia, and Bank Tabungan Negara will merge their different mobile payment services into one platform called LinkAja.
The digital service is expected eventually to expand beyond payments and into other financial services, such as insurance. This new banking-telecom alliance aims to create a third bloc in a market that nearly quadrupled in size in 2018, reaching USD 3.34 billion in transaction value.
However, epayment tools provided by the banks have struggled to make headway against offerings from ride-hailing company Go-Jek and Ovo, the service backed by Indonesia-based Lippo Group. According to industry analysts, the two private companies dominate mobile payments in the country.
The move by the state-owned companies is likely to have the support of the government, which has been pushing for an increase in cashless transactions. LinkAja is scheduled to start in March 2019, and it will allow users to make cashless payments through QR codes. In addition, the new platform is expected to allow users to pay bills, such as utilities, and will not require a bank account, with options to top-up balances at places like convenience stores and ATMs.
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