8 February 2019

Last week, we encouraged members of our Telegram Group to drop their burning questions for OVO Chief Product Officer Albert Lucius for the revived e27 Ask Me Anything (AMA) feature –and he has returned with his answers.

Find out what Lucius got to say about the company’s partnership with Southeast Asian ride-hailing giant Grab –and how they plan to bring greater inclusivity through their work.

Will Indonesia become a digital-first market for payments? Should it? – Kevin M.

Currently, digital adoption for payments in Indonesia is still very low. However, it is growing rapidly. Digital payments have many benefits, including [the ability to] onboard more unbanked Indonesians into financial inclusion.

Whether Indonesia will become a digital-first market depends on many factors: Infrastructure improvements, regulation, and technology enablement. I personally believe Indonesia is heading into the right direction. Indonesia will benefit greatly from digital payments, especially as a fragmented archipelago with physicalinfrastructure that is far too challenging for a full-blown financial and banking service.

What exactly is the greatest challenge in promoting cashless payment in Indonesia? Why did it only begin to take off in 2018? – Anisa M.

The deeply embedded habit of utilizing cash and infrastructure are the key challenges in promoting cashless payment. Having an expansive ecosystem also plays a key role in wider acceptance and adoption of cashless payment in Indonesia.

What are some of your most memorable failures, and what lessons did you learn from it? – Hiro

I’ve personally had many failures in life and I believe that’s part of life. The most important part is that we learned from it.

In the context of building a startup, my most memorable failure was when we put business first ahead of customers. I think the pressure to put business growth ahead is very strong in startup environment, especially due to pressure to grow the business for fundraising. Sometimes, when we are chasing growth, we made business decisions that prioritise short term growth instead of focussing on what the customers really need.

Fortunately, we realised this very early on as we have open communication channel with our customers. We’re here building products ultimately for the customers, so we have to strive to serve them. When you have customers loving your products and services, they will be your supporters for the long term and bring more customers for you.

What is the most unknown and counter-intuitive fact about Southeast Asian startup ecosystem? – Arnaud Bonzom

The Southeast Asia startup ecosystem changed dramatically in the past five years. I remember when I first started hearing about the large Indonesians unicorns (Tokopedia, Traveloka) back then in 2012. No one saw them as a destination to work for.

Then I started Kudo in 2014, we had to literally convince people to move from working in large corporations into joining a startup. Now in 2019, everything couldn’t be more further apart. Working at large unicorns is suddenly the cool thing to do.

What I’m trying to say is that Southeast Asia is a VERY dynamic ecosystem, and it changes very fast. This is not only in terms of people hiring, but also regulation, ecosystem, and competitive landscape. So my tips for any potential founders in Southeast Asia: Don’t wait, do it now. That six months of wait could mean the difference between “you’re the head of the train” or “you’re one of the ‘copycats’ who are always one step behind.”

See: Kudo’s Untold Story: How It Enabled Indonesia’s Unbanked and Got Acquired by Grab

What’s your long-term vision on how the company will change the way Indonesians, Southeast Asians, or even global citizens live? – Julien Condamines

OVO aims to be the premiere digital wallet for Indonesians. We will be supporting Indonesians as they go about their days, from the moment they wake up until they fall asleep. We want to break the heavy habit of using cash, allowing more people to be part of the financial inclusion, and supporting, in the long run, Indonesia’s growth as a digital economy powerhouse.

What is the biggest reward from your partnership with Grab? And what’s the biggest problem? – Patera P.

Since partnering with Grab, we have seen incredible growth towards our goal of making digital payments something anyone can use anywhere, anytime:

• Made cashless payments available for millions of Indonesians for the first time!
• With OVO on the Grab and Tokopedia platform, OVO is now available on more than 115 million devices.
• Our large, shared user base attracts many businesses including many small- and medium-sized enterprises (SMEs).
• With acceptance across offline retail, online-to-offline services, and online commerce, we have become the most widely accepted payments platform.
• As of December 2018, we have onboarded more than 230.000 SMEs into the cashless movement.
• Finally, OVO has now become the e-wallet with the most use-cases. Millions of middle-class consumers use OVO now to pay cashless for Grab transport, Grab food delivery as well as offline transactions at small and large merchants, from warung stalls to major malls

Our value proposition isn’t limited to OVO. As we give Indonesians more reasons to use OVO at more places, I’m glad that it also means Grab drivers can earn more, as more people top-up their OVO wallets with Grab drivers.

What are your plans to ensure inclusivity moving forward? – Prisca A.

OVO currently partners with many organisations focusing on financial inclusivity, such as Kudo and Warung Pintar. Through the reach of their agent network, OVO will be able to reach many Indonesians who are still untapped by technology and financial services.

In addition to that, OVO will continue to expand its partnership with notable brands in the technology and retail sphere, as well as strengthening OVO financial services to attract more merchants and customers. Ultimately providing a significant contribution to the national financial inclusion rate.

More payments players will enter in 2019.

What’s OVO’s user retention and acquisition strategy other than cashback? It seems like payment players are competing in giving bigger cashback percentage nowadays – Richard D.

We keep expanding our services based on Indonesian most use cases. We want to be their primary wallet where customers can use OVO’s financial services from the moment they wake up until they sleep.

In the long run, by enabling consumers to pay cashless for things they usually pay for –but in a more convenient, more affordable, and safer method– that’s what going to make cashless win against cash.

We’ve seen this trend happening in other countries, such as China. I recently visited China, and everyone is using digital payments to pay and send money around because it is the most convenient thing to do. When paying via digital is easier and more convenient than cash, eventually more and more users will create a snowball effect to move to digital payments.

There are so many cashless services. What’s OVO doing differently, and is it too idealistic to think that mobile payments can solve financial inclusion challenges? – Budi Azwar

Our open ecosystem makes it super easy to choose cashless: Our strategy is to build trust and value. We open up our ecosystem and create interoperability with the partners that people trust enough to spend their money with: Grab, Tokopedia, Hypermart, Matahari Department Stores, even your favourite cendol and satay stalls.

Is it too idealistic? I really don’t think so. Financial inclusion is all about opening access to the people to begin with, and then providing a product solution that caters to them. Digital payments have far less barrier to entry compared to a full-blown banking solution. Digital payments also don’t require the heavy investment of infrastructure such as bank branches; it makes digital payment solutions able to expand more rapidly across the archipelago of Indonesia.

Source: e27