Indonesia’s QR payment revolution

Payment by QR is spreading rapidly across Indonesia as consumers value its convenience, and merchants like its relative cheapness. 

What’s happening

Since January 2020, Bank Indonesia has required digital payment services to use standardised QR codes to ensure all banks and electronic wallets are interoperable. Customers can make payments by simply scanning a merchant’s QR code with their mobile phone and are increasingly expecting this service. For merchants, applying for a QR code is simple and costs just $2, far less than expensive card terminals.

Why it matters

It’s a huge behavioural shift among consumers, but not a totally unexpected one: Indonesia already had fast-growing e-commerce and social commerce markets where digital payments are usual. The convenience aspects of online shopping are now being mirrored in the physical world; retailers and brands need to take note.

Takeaways

• QR payments have more than tripled in each year since standardisation; in 2022 they reached 98.5 trillion rupiah ($6.5bn).
• Indonesia has 22.4 million registered merchants, far ahead of the rest of Southeast Asia (Thailand: 7 million; Malaysia 1.1 million), and that number is set to double to 45 million in 2023.
• Bloomberg reports that Bank Indonesia is now testing facial recognition technology to enable payment in places like schools, where students aren’t allowed to carry phones. 
• There are moves to integrate QR payment systems across the region. 

Key quote

“The future of money [and] payments is undoubtedly digital. There is no room for us to just sit and wait” – Filianingsih Hendarta, Deputy Governor, Bank Indonesia.

Sourced from Bloomberg