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How Indonesia’s fintech leaders are thinking about SNAP

Published on April 6, 2023


In a recent episode of Indonesia Digital Deconstructed, hosted by Leighton Cosseboom of AC Ventures, Flip COO Gita Prihanto, and Tessa Wijaya, co-founder and COO of Xendit unpacked a variety of topics, including Xendit’s regional expansion plans and strategic investments, as well as how both companies are thinking about Bank Indonesia’s newly launched National Open API Payment Standard (SNAP). The group also discussed why and how more women can join the fold in Southeast Asia’s fintech game.

How Indonesia’s fintech leaders are thinking about SNAP

The transcript below has been condensed and edited for focus and clarity.

Leighton: What is your view on the rise of fully digital banks in Indonesia, and what does it mean for the nation’s underbanked population?

Gita: Digital banks are still trying to win the hearts of the bankable segment in urban and suburban areas, especially the affluent and mass segments because they are more technologically savvy and appreciate the value of easy access and convenience. However, there is still a lot of work that needs to be done to tap into the underbanked segment, as they still require certain offline support, such as working with retail store partners or small branches. With enough investment in education, the adoption of digital banking will grow more, and cooperation with banks as a source of funds or destination accounts can help users in the underbanked segment.

Leighton: Do you see any potential cooperation developments between fintech companies and incumbents, or is it purely a competitive dynamic?

Tessa: Collaboration is essential in providing simplified payments to consumers. The ecosystem is not about killing banks, but working with them, as everyone has a part to play in providing simplified payments to consumers. It is crucial to focus on things that are important to both parties, such as payment security, reliability, and consumer protection. Through communication and working together, fintech companies and incumbents can get to the same finish line and expand the halo of digital banking.

Leighton: What are some of the things that fintech companies are working on with regulators, and what are the challenges faced by regulators in Indonesia?

Tessa: Regulators are often misunderstood in Indonesia and Southeast Asia, but they are starting to understand that digitalization is a must, and they must think about this new world. It is great to see regulators understanding that interoperability, for example, in payments, is essential. Fintech companies are working with regulators to make payments simpler and easier, such as the case with QR codes. I think regulators are always looking to improve communication and collaboration and focus on important areas such as payment security, reliability, and consumer protection.

Gita: Tessa, what are your thoughts on the SNAP regulation, in which Bank Indonesia has mandated that all payment service providers implement a standard API? How do you think it will impact Xendit’s business overall?  

Tessa: I actually think governance regulations are good. I’m not in favor of everything being free for all. I believe there are certain areas where businesses, that naturally focus on profits, should deliver, while there are other areas where governments need to enforce regulations to ensure the best outcomes for consumers. So, I think Bank Indonesia’s SNAP regulation, which aims to standardize APIs, is coming from a positive place. It’s fantastic because it means that both consumers and businesses will find it much easier to use financial products in the market. Will it present challenges? I don’t think so, as the field we operate in, APIs, is something we are proud of rolling out. 

Additionally, we are aggregating payments from various banks and wallets, as well as helping to roll out QR codes with Bank Indonesia and promoting unified payments regionally, not just in Indonesia. So, having standardization in each market is important for us to play there effectively. These moves by regulators are brave and beneficial, as they enable the use of standardized QR codes for payments in multiple countries. For example, you can make a payment just by scanning a QR code in Thailand, Singapore, or elsewhere. I think it’s great, and with such pushes, it will enable us to provide even better products for businesses on our platform. 

Get the full episode for free on Spotify, Apple, and Google.

See also:Tackling SME payments and bank transfer fees in Indonesia
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