Contactless Situation Shifts the Transaction Trend to Cashless

Heaptalk Team, economy . 13 Sep 2020
Contactless Situation Shifts the Transaction Trend to Cashless - Business Profesional Portal, Jakarta – With the rise of the ratio of infected people due to the Covid19 Pandemic, it is enforcing them to do anything in the distance, contactless, and remote. One of the most inseparable activities in the society, particularly for the urban is a transaction – found get done in a non-cash method, with single integration that automatically connects their mobile phone to their bank account and transferred to merchants’ accounts.

Then it is undeniable that the Covid19 Pandemic ever gives every economical line a sudden shock that impacting many business sectors do their adoption. One of the sectors is banking and fintech – it has been over 6 months that the digital transaction has been accelerated considerably along with the trend of “do everything from home” by the people. As a result, concerns about the people health, safety, and risk, they are starting to shift from using cash and coins to digital, as the consumers and merchant are more eager than ever to adopt the digital payment methods.

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As the result, there is a shifting trend in doing daily transactions. As cited from the global research, there is 82% consumers are concerned about going to their bank, 73% prefers to do a remote errand, while 65% are more inclined to try the digital app. Especially with the behavior growth in millennials and young couples class who are increasingly dominant with digital banking, namely those aged between 20 – 45 years – across the group, online banking is highly adopted.

Those make the banking sector more active. Bank Central Asia (BCA) for example, as the market leader of the banking sector they have anticipated any possibilities including the increasing of customer activity on digital banking, so they increase the performance of their techy infrastructure like nodes, reliance, security, data center, as well as preparing the human resources to adaptive even during the remote operations. As we know the three main excellences of its digital banking services are cardless transactions, QR code payment, online payment to multi-tenants.

Director of BCA, Santoso said that improving aspects of security and technology performance is taken as high precedence because from the provider side it is required to be able to provide fast service, both from the QR code feature, authentication, and other supporting services, so it is increasing the level of user convenience. As for potential fraud caused by phishing problems, malware, carding, social engineering, and SIM Card Take-Over, there is no more issue of this to emerge.

Other than that, the initiator of agile culture in digital banking, BTPN with its service Jenius, assisting customers with no longer needs to go to a branch office to create a new account. Just simply handled in the mobile apps with single steps.  What makes it interesting is how they are applying a working method that is highly adaptive to any business change is called ‘Agile Working’ supported with ‘Scrum’. It makes the development is faster, more accurate, and more deliverable to the customer so it can serve what the customer needs on their financial activity effectively.

State-owned banks do not want to be outdone by providing services that are supportive of the needs of their customers. This is what is being optimized by the trio of state-owned banks in Indonesia, such as Bank Mandiri, Bank Nasional Indonesia (BNI), and Bank Rakyat Indonesia (BRI), namely that they tend to target the creative economy sector and MSMEs. This is in line with the growing opportunity for the bankable segment population which is increasingly dominant, especially from the middle class, young professionals, families, and Micro and Small Medium Enterprises (MSME) players who are digitally literate. Plus, the high penetration of smartphone users, who reach 64% of the total existing population, encourage the bank to uphold programs that align with the customer’s behavior.

Bank Mandiri for example, has disbursed credit to the productive micro-business sector amounting to Rp. 41 trillion. The company is also trying to encourage the composition of MSME loans to increase by 20 percent. While BRI is targeting the microcredit to grow to reach 8%, and as cited by Supari, Micro Business Director, he is optimistic about the readiness of MSME to face the second wave of social restriction policy as he had toured the market to see the conditions of the players. According to him, micro actors are optimistic after slumping from the first wave.

The new hype is also shown by Maybank, the Malaysian-Owned Private Bank took advantage of this good momentum by launching a mobile banking application called, M2U. The mission is to present a digital banking experience that is no longer physical, but already in a pocket or hand through a smartphone. Declared by Michele Hamilton, Head of Strategy, Transformation, and Digital Officer Maybank, M2U presents multi-use banking services, where besides being facilitated by the QR Code feature, multi-tenant payment, top-up to fintech services such as DOKU, eWallet, Gopay, and OVO, this application allows customers to make more advanced personalization.

“We proudly present a lifehack inside M2U, where customers can personalize up to the level to manage monthly expenses for entertainment, daily utilities, education, foods, health, and many more,” explained Michele. This is interesting, considering there are a lot of simplifications that customers can experience. Including what he said, the transfer fee between banks can be cut to only Rp. 3,500 per transaction.

Maybank, also explained that the launch of the M2U Smart Banking application was based on the customer’s desire for a simpler, better, faster, and more complete transaction process. Moreover, the current situation greatly supports customers to do digital activities. Thus, all activities that are usually carried out at branches can be presented digitally via a smartphone.

The remote banking trend also gives a mutual synergy that was formed from the Bank sector to the fintech for example with Gopay, Ovo, Dana, LinkAja, Kredivo, and Akulaku. As cited from Investor Daily, BNI transactions on the non-bank sector increased by 84.4%. Meanwhile, BCA account opening through video banking reached 5,100 / day or digital payment, which has increased by 20-30%. BRI also experienced a rapid increase were in May 2020 transactions via digital banking reached 6 million / day, an increase of 31%.

This is similar to the intense campaign program run by fintech players. Even though they are competing with each other to acquire active users the presence of these fintech players has strengthened the market itself. These fintech players are running campaigns both soft and hard. On the one hand, there is a disruptive side, but on the other hand, it can become a new ecosystem that complements the existing digital banking market.

Senior deputy governor of Bank Indonesia (BI) Destry Damayanti said, in the Electronic Money (e-Money) market sector, the transactions in Indonesia’s retail market skyrocketed by 4.4 times in Last July 2020, compared to the two quarters earlier, with nonbank fintech dominating the scene as the country works its way toward a cashless society. The increase in transaction volume was caused by the active digital behavior of MSMEs, the majority of which are no longer considered early adopters, but active users.