<article>Indonesian state-owned enterprises have joined forces to launch a single unified mobile payment service to challenge the domination of market leaders Go-Pay and OVO in the country.</article>

Indonesian state-owned enterprises have joined forces to launch a single unified mobile payment service to challenge the domination of market leaders Go-Pay and OVO in the country.
The six companies involved are set to pool together a total investment of $80 million as capital for the new LinkAja platform, an industry executive aware of the developments has told DEALSTREETASIA.
LinkAja, set to be launched in early March, will be a server-based e-money service which merges the existing e-wallet platforms of telco firm Telkomsel, and lenders Bank Mandiri, BRI and BNI. It will allow users to make online purchases and money transfers, as well as cashless payment through QR codes.
Users of Telkomsel’s T-Cash, Mandiri’s e-cash, BNI’s yap! And Uniqku and BRI’s T-Bank have been informed by their respective banks of the imminent switch to LinkAja &#8211; all describing the move as a way to “provide a better and more comprehensive e-money service for the public”.
Other state-owned enterprises involved in the initiative include another lender BTN, as well as oil and gas firm Pertamina and insurance firm Jiwasraya.
The breakup of each firm&#8217;s capital contribution towards this $80 million total has not been established.
While all the firms will contribute to the new venture, it is understood that T-Cash team will lead the operation, given the latter&#8217;s superiority over the other platforms in terms of both number or users, transaction value and product and services on offer.
T-Cash, led by CEO Danu Wicaksana, claims 25 million users and 52,000 merchants as of July 2018. Its platform allows users to pay for things like phone credit, internet data and electricity bill, while the enabling purchase of digital products like game vouchers and e-commerce goods.
In fact, it is known that the alliance of state-owned firms have decided to have LinkAja operate under Telkomsel subsidiary Fintek Karya Nusantara (Finarya). After the consolidation, however, all six will have a stake in the company, with Telkomsel holding 25%, Mandiri, BRI and BNI each taking a 20% stake, BTN and Pertamina both with 7%, while Jiwasraya is expected to own 1%.
It is understood that this initiative had come from the instruction of the country’s State-Owned Enterprises Minister Rini M. Soemarno, with communication Minister Rudiantara also heavily pushing the move.
The move, which comes just a month before the country’s presidential election in April, is a show of the government’s determination in having a state-affiliated player in the burgeoning mobile payments market, which is currently dominated by Go-Jek’s Go-Pay and Lippo’s OVO, which also counts Grab as one of its shareholders and leading e-commerce firm Tokopedia as a partner.
According to Daily Social’s <a href="https://dailysocial.id/post/fintech-report-2018">Fintech Report 2018</a>, which shows the result of a survey conducted on 825 respondents, Go-Pay came out as the most popular e-money brand with 79.39 percent, followed by OVO with 58.42 percent. The two are followed by T-Cash, DANA and Paytren.
Both Go-Pay and OVO have been pushed to the top of the mobile payments tree by the extensive amount of uses cases it derives from the services of their respective holding company, but largely driven by the popularity of Go-Jek and Grab’s ride-hailing service in Indonesia.
While the coalition of state-owned firms may easily lift LinkAja’s number of users close to the level of Go-Pay and OVO, industry players have said that it would be difficult to compete in the number use cases.
LinkAja is anticipated to struggle when it goes up against heavily funded competitors such as Go-Pay and OVO, driven by the billions of dollars of investment poured into Go-Jek and Grab. As a subsidiary of state-owned firms, many of which are listed, LinkAja may be expected to be prudent and even profitable in running its business.
However, LinkAja’s performance may soon be boosted by a partnership with either WeChat and AliPay, both of whom have reportedly been in talks with a number of state-owned banks for potential collaboration. The talks with two Chinese digital payment giants are understood to be temporarily halted and set to be resumed following LinkAja’s launch in March.
Also Read:
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/indonesia-crunch-go-pay-ovo-go-jek-108333/">INDONESIA CRUNCH | Go-Pay versus Ovo – Is this where Go-Jek falls behind?</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/theres-room-for-more-players-in-indonesias-payment-space-emteks-daniswara-112285/">There’s room for more players in Indonesia’s payment space: Emtek’s Daniswara</a>
<a style="color: #ff0000;" href="https://www.dealstreetasia.com/stories/indonesia-digest-wechat-alipay-making-inroads-bukalapak-launches-new-feature-109825/">Indonesia Digest: WeChat, Alipay making inroads; Bukalapak launches new feature</a>

Indonesian state-owned enterprises join forces to launch single unified mobile payment service to challenge the domination of market leaders Go-Pay and OVO.



Indonesian state firms said to pool $80m capital to launch Go-Pay, OVO competitor

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief

Indonesian state firms said to pool $80m capital to launch Go-Pay, OVO competitor

Continue reading this premium story with a subscription to DealStreetAsia.

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief