Indonesia, with its burgeoning e-commerce market, presents a diverse array of payment methods catering to its vast population. The payment landscape mirrors the country’s blend of traditional and modern retail experiences. This article explores the payment methods in Indonesia, shedding light on how each method is tailored to meet the unique demands of consumers in this digital age.
Payment by card in Indonesia
Card payments in Indonesia are experiencing steady growth, supported by an increased shift towards non-cash transactions. The market is expected to reach IDR 1,093.6 trillion ($71.8 billion) in 2024, with a compound annual growth rate (CAGR) of 9.7% between 2019 and 2023. However, credit card penetration remains low, at around 5% of the population, which is significantly lower than in neighboring countries like Thailand and Malaysia. This is due to the rise of alternatives like Buy-Now-Pay-Later (BNPL) and QRIS (Indonesia’s QR payment system), which have rapidly gained popularity in recent years.
Credit cards in Indonesia offer users benefits such as reward points, discounts, and loyalty activities, but debit cards dominate the overall card payment landscape. Debit cards accounted for 58.9% of card payment value in 2023, and they are increasingly used for payments, particularly for small to medium-sized transactions.
One of the most important developments in 2024 is the ongoing expansion of Indonesia’s Gerbang Pembayaran Nasional (GPN). While GPN originally launched as a domestic debit card network, it is now being extended to cover credit card transactions, aiming to reduce reliance on foreign networks like Visa and Mastercard. This local initiative is expected to lower transaction costs and increase financial independence for Indonesian consumers and merchants.
Local actor: Gerbang Pembayaran Nasional (GPN), BCA
Payment by cash
Even for online payments, cash payment is still common in Indonesia. Cash on Delivery (COD) is used for online purchases, allowing customers to pay in cash upon receiving their online orders. This method is favored by online shoppers, especially those who prefer to pay in cash for their online purchases. Online retailers facilitate this online payment option for consumers.
Local actors: Alfamart, Alfamidi, Indomaret, Sinarmas, TCash
  
  
  
 
Payment by Bank Transfer
Online bank transfers are common in Indonesia, offered by major Indonesian banks such as Bank Mandiri, CIMB, and Bank BRI. However, there is a high dropout rate for online bank transfer payments, reaching up to 50% in some cases. The time period for consumers to transfer their money online varies by merchant, ranging from a few hours to 48 hours. Small online merchants tend to have a lower dropout rate, between 80% and 90%.
Local actors: BCA, PermataBank, Bank Sampoerna, ATM Bersama, Mandiri, BNI, Danamon, CIMB, BRI, BSI
  
  
  
  
  
 
  
  
  
Payment by installment and BNPL
The BNPL (Buy Now, Pay Later) model has seen rapid growth in Indonesia for online payments. BNPL companies sometimes lose money, but they offer consumers the option to split their online payments into multiple installments. In 2022, online BNPL payments experienced significant growth in Indonesia, providing online shoppers with more flexibility for their purchases.
Local actors: Kredivo, Akulaku, Traveloka PayLater, Empatkali
  
  
  
Payment by digital wallet and X-Pay
Digital wallets (e-wallets) have become very popular for online payments in Indonesia, especially due to the high number of unbanked individuals. E-wallets allow users to store money in their account and make cashless transactions online via their smartphone. Key e-wallets in Indonesia include OVO, Dana, ShopeePay, GoPay, LinkAja, and Doku. They are widely accepted on e-commerce platforms, simplifying online payments for consumers.
Local actors: OVO, Qris, Jenius, Akulaku, Doku, Gopay, Kaspay, Paytren, LinkAja, Dana
  
 
  
 
  
  
 
  
If the payment methods in Indonesia intrigue you, feel free to access the #PayWorldTour library for more insights.
