Development of Credit Card and Debit Card Usage in Indonesia

by | Nov 5, 2021 | Market Research | 0 comments

The Indonesian market for the payment industry

Source: Unsplash

People’s daily lives have changed after the Covid pandemic. This accelerates the digitization of the payments industry for up to two to three years due to ongoing lockdowns, restrictions, public health issues, changing spending trends, and societal habits.

The power dynamics in the payments industry are changing as businesses and consumers shift cash checks to digital payment methods. Thus, Credit and Debit Cards become the most dominating tools to be used in making payments or transactions.

Which global payment service brands have successfully expanded their market in Indonesia? What is the outlook for the payment industry in Indonesia? Read this article to know more!

The Overview of Payment Industries Development in Indonesia

Online payments in Indonesia are growing rapidly and advanced. Payment instruments continue to grow from cash-based means of payment to non-cash payment instruments such as paper-based payment instruments until it is time to use paperless payment tools such as electronic funds transfer and payment instruments using Self-Directed Cash Bridge Cards, Credit Cards, Debit Cards, and Prepaid Cards (Card – Based).

For people who often travel abroad, credit and debit cards have become one of the most practical payment media. Along with the many people who are interested in using this credit card, many banks also offer a variety of special features and discounts for their users.

Here are some overseas companies that are expanding the market or investing in payment services in Indonesia:

  1. Mastercard

Mastercard is a technology company in the global payments industry that operates the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments, and businesses in more than 210 countries and territories. Mastercard provides the infrastructure for companies of all sizes to utilize several payment processing technologies to improve their business.

Referring to data from the Indonesian Credit Card Association (AKKI), the number of outstanding credit cards issued by issuers is around 17.5 million cards. However, in Indonesia terms of growth it is 0.3 – 0.5% per year. This makes Mastercard need to strategize to support credit cards used during the new normal.

  1. Visa

Visa is a global payments technology company working to enable consumers, businesses, banks, and governments to use digital currency. Visa provides the infrastructure for companies of all sizes to utilize several payment processing technologies to improve their business. Visa offers payment processing capabilities. You can see what Visa charges for interchange fees online.

Visa credit card transactions in Indonesia increased by 9% from November to December 2018, compared to the same period last year. Based on the Visa Global Travel Intentions Study, about 55% of Indonesians want to strengthen their relationships through traveling with family, friends, and closest relatives.

  1. Western Union

Western Union offers stores and an online portal to make payments, receive money, and pay bills. It also offers prepaid cards and money orders. Western Union allows users to send and receive payments with the click of a button. Western Union offers a very simple set of features that encompass all the needs of a business for free. According to the World Bank, Indonesia is one of the largest remittance countries in East Asia and the Pacific in 2020. Western Union services are available to more than 20,000 Agents in Indonesia.

Western Union has collaborated with Bank Rakyat Indonesia and Bank Syariah Indonesia to expand the reach of customers in Indonesia in accepting international money transfers. Customers can receive money at 4,000 – 8,000 Bank Rakyat Indonesia locations and 650 Bank Syariah Indonesia locations with full access in the coming months. Global shippers can send money using Western Union services in 75 countries, plus western union agents’ regions or networks around the world. 

The Future Prospects of Payment Industries in Indonesia

According to research conducted by The Nilson Report, the most respected source of news and analysis of the global card and mobile payment industries, Global general-purpose cards carrying Visa, Union Pay, Mastercard, JCB, Diners Club/Discover, and American Express brands generated 227.08 billion purchase transactions at merchants in 2015, an increase of 16.1% over 2014, according to The Nilson Report,  the top trade newsletter covering the card and mobile payment industries. Purchase transactions included all commercial and consumer credit, debit, and prepaid cards.

Visa cards, which include both Visa Inc. and Visa Europe, accounted for 55.52% of all purchase transactions worldwide. Debit cards with the Visa brand continued to account for the most purchase transactions with a share of 35.50%, followed by Visa credit cards with 20.02%, Mastercard credit cards with 13.14%, and MasterCard debit cards with 13.13%. Commenting on the results, David Robertson, Publisher of The Nilson Report said, “When consumers worldwide reach into their wallets for a payment card, more than half of the time, they use a Visa card.”

Credit, debit, and prepaid cards in circulation totaled 10.25 billion at the end of 2015, up 8.2% over year-end 2014. Visa accounted for 28.95%, down from 30.23%, and MasterCard with 15.35%, up from 14.96%.Of the total cards in circulation, 75.94% were debit, up from 74.61%. Debit cards in circulation grew by 716.3 million compared to a 61.4 million increase for credit cards.

Recorded throughout 2016, Bank Indonesia said there had been transactions of IDR 5,623.91 trillion using a debit card or Self-Directed Cash Bridge type. While transactions using credit cards in 2016 reached IDR 281 trillion. Finally, the transaction process using e-money recorded as much as IDR 7.06 trillion.

Based on data from The Nilson Report, it can be concluded that the use of global cards such as Visa and Mastercard has increased. From the data,  it is also seen that Visa is the global card with the most demand for transactions used by consumers. This is related to transactions in Indonesia, where the data explains that there has been an increase in transactions using Debit Cards and Credit Cards as a practical means of payment.

Enter The Indonesian Payment Service Market with BRIGHT Indonesia 

Due to the high number of payment service users in Indonesia, Indonesia certainly has a large payment service market potential. However, to enter the Indonesian market, it is easier to have a local partner to assist you.

Thus, BRIGHT Indonesia is an ideal business partner for you. We will assist you on the ground, including virtual assistants during the mission, logistical planning, and detailed communication. It can cause your company to focus on developing partnership cooperation rather than the hassles of the business trip.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

  1. Provide assistance for you in expanding and developing your business by identification of potential partners.
  2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arrange business meetings, and act as a liaison.
  3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
  4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email

*This article is written by Syarifah


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