Unbanked consumers in Indonesia can avail themselves of credit-like services as the leading digital payments brands offer “pay later” options to those people buying on their platforms.

Both Go-Pay, which grew out of ride-hailing app Go-Jek, and Ovo, developed by the Lippo Group conglomerate and in which rival ride-hailing app Grab also has a stake, now offer a service that allows users pay at the end of the month for all the purchases they make in the preceding weeks.

Go-Pay charges a 25,000 rupiah ($2) fee and has an upper spending limit of 500,000 rupiah, according to the Nikkei Asian Review, and while Ovo’s version is currently free it is expected to start charging soon.

“This is an expected shift as the purely payment-system model has low, or even negative, profitability,” Johan Sulaeman, associate professor of finance at NUS Business School in Singapore, told the Review.

Pay-later services, he explained, “can provide additional benefits to the platform in the form of high implicit interest rates – service and late fees – and credit scoring using users’ activities in the platform.”

Earlier this year Go-Jek founder and CEO Nadiem Makarim revealed that digital payments formed the most significant part of Go-Jek's overall gross merchandise value, ahead of ride-hailing and food delivery.

In a market where many consumers do not use bank accounts or credit cards, Go-Pay and Ovo anticipate their new services will help them develop into financial platforms, using all the data they possess to assess consumer risk.

Go-Pay CEO Aldi Haryopratomo told the Nikkei Asian Review that such financial technology would permit unbanked users to “grow their credit history and move up the economic ladder.”

Ovo already offers mutual funds to some users via a partnership with a mutual fund marketplace, according to Makoto Honda, head of Ovo investor Tokyo Century.

“Our plan is to expand the product offering, be it financing, lending, asset management,” Honda told the Review. “We don’t know if payment [transactions] will ultimately make money, but financing can contribute to our revenues.”

Sourced from Nikkei Asian Review; additional content by WARC staff