Retail Payment Systems
In the OIC Member Countries
56
Mobile Banking
In February 2013, Bank Indonesia gave approval to a mobile payments system developed by
BlackBerry, PermataBank and mobile banking service provider Monitise. The BlackBerry
Messenger (BBM) payments service allows, for the first time, users to make real-time
payments and to transfer money between bank accounts.
Five of the 12 mobile operators in the market control more than 90% of the subscribers and
92% of income revenue. Mobile penetration stands at around 67%, with individual subscribers
topping 100 million (150 million active SIMs) (USAID, 2011). In 2010, Telkomsel and Indosat
each requested and obtained additional 3G bandwidth. XL and Axis, which received their 3G
licenses in 2006 and 2005, respectively, also requested additional 3G spectrum. These
requests reflect the growing penetration and use of smartphones and related data services.
The increased bandwidth is intended to strengthen network service capabilities, enabling
delivery of data services in greater volume.
Where mobile banking has already been made available in Indonesia, it has primarily been as
an additional channel for those already holding bank accounts. It has also been
disproportionately concentrated upon the larger developed urban areas of Jakarta, Bandung,
Surabaya, and Denpasar, Bali. The questions being addressed here are whether there is
demand from those without bank accounts or those with limited access to financial
institutions, what that demand may be (i.e., whether it differs from the services being offered
by banks and financial services providers), and whether it could be provided via mobile phone
networks.
Although m-banking is still in its early stages of development in Indonesia, a number of players
have already become actively involved in various forms of mobile banking and mobile
payments services. These early movers primarily come from the leaders of the banking sector
and the telecom industry, but they also include third-party platform and software providers.
As a result, three distinct models of m-banking service delivery can be drawn: the carrier-led
model, the bank-led model and third-party models. The third-party led model offers a
particularly interesting option for Indonesia currently in that it is operator-agnostic and
benefits from the possibilities offered by the current banking regulations.
Demand for mobile banking services in these banks, as in other countries, transformational or
otherwise, can be ranked in the following order: 1. top-up, 2. bill payments, 3. transfers, 4.
remittance, 5. transactions (IFC, 2010). These services could be viewed as an iterative
progression, with over-the-air top-up already prevalent throughout the market. Moreover,