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Indonesian e-wallets may be dominated
Last Updated:2021-01-20 Tag:southeast asia Reading Times:

At the end of 2020, rumors about the merger of Grab and Gojek are becoming more and more intense. If the merger is successful, this will become the largest Internet business merger in Southeast Asia. If the merger is successful, the Indonesian e-wallet industry may be unified.


At present, the Indonesian e-wallet market is mainly occupied by OVO, Gopay (GoJek) and Dana, covering almost all payment scenarios in Indonesia. At present, the three are still in a battle for market share.



OVO and DANA have similar investment backgrounds. The main investor of OVO is the SoftBank Group from Japan. Alibaba will also inject US$3 billion into OVO’s main shareholder Grab in recent negotiations (although the two parties have not yet confirmed); Dana is called Indonesia's Alipay has investment and payment technology from Alibaba, and SoftBank Group is an early investor in Alibaba. Therefore, there are common investors behind the two, and the merger is a logical thing in the market.


Considering the potential relationship between OVO and DANA, if Grab and GoJek merge, there will be a giant in the Indonesian electronic payment market, and the rest of the many small e-wallets seem insignificant.



In fact, according to Bank Indonesia’s financial policy, such monopolistic mergers are not allowed. Grab and Gojek must first obtain the central bank’s permission before they can integrate their payment services.


But Grab and Gojek may be able to use their huge influence in Indonesia to persuade BI (Bank Indonesia) to allow their merger. As we all know, Grab's co-founder Anthony Tan and SoftBank's Son Zhengyi have a good relationship and have a close relationship with President Joko Widodo and the Minister of Maritime Affairs and Investment Coordination Luhut Binsar Pandjaitan. At the same time, Nadiem Makarim, the co-founder of Gojek, served as Minister of Education and Cultural Affairs in the Jokowi cabinet.


If the merger is reached, the impact on Indonesia’s electronic payment industry may be positive. With the help of the GoJek super app’s ecological coverage of Indonesian daily life, coupled with the ride-hailing, offline supermarkets and e-commerce scenarios brought by Grab, it almost covers Ordinary people in Indonesia make all daily payments. For resource integration, it is indeed possible to adopt the best internal solutions in a certain field, and it can also reduce the resource consumption caused by competition, which has certain significance for investors and society.



However, the impact of monopoly on the people is not yet known. It is conceivable that there is no subsidy for the benefit of the people due to market share competition, which will at least reduce the benefits of the people. Moreover, investors will have stronger requirements for profit on the new platform, and it is unknown whether the pricing of products and services will increase. Perhaps maintaining the status quo is not a bad thing for the people.