Behind Indonesia's Rapidly Growing Digital Transaction Trend

Jun 20, 2022

Digital transactions are a necessity amid the rapid development of technological innovation. In Indonesia, this situation is noticeable from the changing behavior of people who increasingly use technology-based financial services to facilitate their cashless transaction activities. Some of the services that have experienced this growth are debit cards, electronic money, and digital banking. Bank Indonesia (BI) stated that Indonesia's digital economic and financial transactions in 2021 will continue to grow in line with increasing public expectations and preferences for online shopping.

This growth is visible in a significant increase of the volume and value of transactions for various non-cash payment methods that utilize the latest technology services. According to BI records, the value of Electronic Money (EU) transactions in May 2021 reached IDR 23.7 trillion, or an increase of 57.38% (yoy). In addition, the volume of digital banking transactions also continued to grow and recorded a growth of 56.49% (yoy) or reached 601.2 million transactions in May 2021, with a transaction value that grew 66.41% (yoy) of Rp3,117. 4 trillion. Meanwhile, the value of transactions using ATM cards, Debit Cards, and Credit Cards for payment in May 2021 also grew by 21.03% (YoY), with a total of IDR 689.7 trillion. One of the drivers of this positive movement is the increased economic activity due to the needs of the community ahead of Eid al-Fitr 1442 H amid the pandemic situation.

Behind this rapid growth, there is the role of various financial industry players who are trying to encourage the advancement of the digital payment system in Indonesia. One of them is the Payment System Infrastructure Operator (PIP), such as switching institutions. Even though they do not interact directly with customers, switching institutions enable a seamless interbank transaction process, thereby providing a better experience for customers. In a nutshell, switching in the payment industry is an electronic system used to connect communication lines between banks. That way, transaction data processing between banks and other digital financial industry players can run seamlessly.

Jalin's active role in facilitating the growth of digital transactions in Indonesia

In Indonesia, one of the experienced switching institutions that support digital transaction and payment systems is PT Jalin Payment Nusantara (Jalin). Jalin has two primary services, namely Switching with the "Link" brand and Managed Service for ATMs. In addition, Jalin also innovates through the development of a modern and integrated digital platform in line with transaction needs that continue to transform in the digital era. The switching that supports the transactions of 35 bank and non-bank members of Jalin has three service scopes, namely ATM Switching, Debit Switching, and QR Switching. These three services enable customers to conduct transactions seamlessly and comfortably. For example, customers cash withdrawal transactions, balance inquiries, transfer of funds, or paying bills through all banking channels incorporated in the Link switching network.

Meanwhile, Managed Service (MS) offers comprehensive ATM management and maintenance services. The scope of services consists of ATM Machine Rental, Second Level Maintenance ATM, ATM Premises Maintenance Services, ATM Cash Monitoring & Forecasting, 24/7 ATM Monitoring Services, to ATM Branding. Collaboration and synergy with BUMNs and professional partners engaged in the financial services sector also continuously forged and strengthened. Hence, the operational services quality and the digital innovation and physical channels development such as ATM, CDM, and CRM can continuously improve. It is one of the steps taken by Jalin to connect the community with the financial and non-financial ecosystems to create a secure, integrated, interconnected, and efficient interoperability payment system. In the future, Jalin will also expand its services to include cross-border QRIS, infrastructure sharing, and technical support for each banking service. This is aligned with Jalin's vision as The National Digital Highway so that people can enjoy secure, comfortable, and efficient transaction services.

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