Indonesia intends to impose fixed charges on some e-wallet activities, five people aware of the matter stated, in a step that might choke a critical revenue stream and raise costs for payment startups sponsored by the likes of Alibaba’s Ant Financial.
Providers of e-wallet companies in Southeast Asia’s largest economy presently customize fees for distributors, charging a premium from big retailers and absorbing prices for smaller merchants to get them to use their services.
However, Bank Indonesia has already discussed with the most prominent digital-cost startups to make fees on QR code transactions uniform, the individuals stated, building on its move in August to standardize digital payments that use the matrix barcode.
Leading the herd of e-wallet firms in the nation is home-grown ride-hailing startup Gojek, sponsored by firms, including Alphabet’s Google, and startup OVO, in which Gojek competitor Gijek has a stake. Ant Financial’s e-wallet DANA trails them, together with state-owned payments service LinkAja.
The central bank wishes to fix some e-wallet transaction fees at 0.7%; the individuals added, a transfer that could prevent smaller merchants that now pay next to nothing from staying on the e-wallet network or force the latter to extend incentives.
Fixed charges on payments at bigger distributors, like Starbucks that are currently charged up to 2%, would additionally notch revenue for the e-wallet companies, the people stated.
The startups have already burned through thousands of dollars in incentives to attract distributors in Indonesia, where a multi-billion greenback digital payments business has flourished as more than half its population doesn’t have bank accounts.