East Ventures


12 October 2023

From Portfolios

Jack’s financial solutions to empower Indonesia’s SMEs

Indonesia is witnessing a significant rise in its new middle class, primarily driven by digital technology. Small and Medium-sized Enterprises (SMEs) are at the heart of this transformation, set to become a key driver of Indonesia’s development. 

According to data from the Ministry of Cooperatives and SMEs of the Republic of Indonesia, over 64 million SMEs contribute 61% of Indonesia’s Gross Domestic Product (GDP), making up 99.99% of the total business population and employing 97% of the workforce. However, despite their significant contributions, SMEs face various financial challenges, including limited access to credit and financial services, cash flow management, regulatory hurdles, and a need for improved digital infrastructure.

Jack, formerly known as Transfez for Business, has emerged as a platform designed to help SMEs tackle these financial challenges. East Ventures had the opportunity to speak with  Edo Windratno, CEO of Jack, to gain insights into how the platform has adapted to support SMEs. 

The evolution of Jack

Jack’s journey began as Transfez, co-founded by Edo and Bondan Herumurti in 2020. Initially focused on remittances, Transfez identified a gap in the market. Traditional players like banks and legacy services such as Western Union dominated cross-border transactions through offline channels. Transfez stepped in as Indonesia’s first digital remittance platform to bridge this gap. 

In 2021, Transfez received investment from East Ventures, marking a significant milestone in its growth. As Transfez expanded, it made a crucial discovery. Most of the transactions were originating from SMEs. These SMEs initially used the platform as individual users and later leveraged it for vendor payments overseas. Recognizing this trend, Transfez shifted its focus towards serving the business-to-business (B2B) segment. As they delved deeper into the B2B market, it became apparent that cross-border payments were just one of the many challenges SMEs faced in managing their finances.

Transfez for Business rebranded as Jack to address these challenges and diversify its product offerings. The platform introduced Corporate Cards, International Transfers, Local Transfers, Reimbursement, Payroll, and Bill Payment services. This integrated approach streamlines financial operations, from submission and approval to payment and reconciliation. SMEs that had to juggle multiple bank accounts, personal credit cards, and paper-based approvals, could now streamline their financial workflows.

Empowering SMEs

Jack’s mission is clear: to help SMEs save money and time by addressing specific pain points. One notable offering is their corporate cards. Obtaining corporate cards from traditional banks can be a lengthy and cumbersome, often taking months to complete. These cards from traditional banks can also be inflexible, with limited issuance and delayed reconciliation. 

Jack’s solution allows instant card issuance upon customer onboarding, enabling unlimited card issuance and real-time transaction tracking through a mobile app and web portal. The feature empowers finance teams and founders, giving them greater control and transparency over expenses.

For local and cross-border transfers, SMEs can benefit from improved cost-efficiency through substantial transaction fee reductions, often up to 60% less compared to traditional banks. These cost savings can significantly impact SMEs dealing with international payments.  

Reimbursement processes, often involving tedious paperwork and back-and-forth between applications, can be fully automated through Jack’s software. According to the PwC Finance Benchmarking Report 2019-20, automation can reduce processing time by 30% to 40%,  enabling SMEs to save valuable hours that can be redirected toward more strategic activities.

Additionally, Jack offers real-time transaction tracking to enhance financial control and accountability. Employees are prompted to upload receipts and supporting documents after each transaction, ensuring a complete and transparent record of expenses within the organization.

Safety, trust, and security

As digital technology rapidly expands, it brings opportunities and risks for SMEs. Therefore, financial literacy is crucial when navigating the fintech landscape. Fintech platforms can enhance SMEs’ financial literacy by providing user-friendly interfaces, educational resources, and transparency in economic processes. This empowers SMEs with the tools needed to make informed financial decisions and recognize potential pitfalls and predatory practices.

The shift from traditional banking and separate platforms to a unified solution can raise doubts among users. 

To overcome these doubts, Jack is a licensed institution that is subject to strict regulatory supervision, such as Bank Indonesia. The platform is designed to ensure the utmost security of both customer funds and data, providing users with confidence when carrying out financial transactions in the digital realm.

Jack also has its track records and partnerships with well-known brands. “Social proof of trust helps potential users feel confident adopting Jack’s services. Many big brands use our platform, from SMEs to enterprises,” Edo notes.

A tailored approach for every vertical

Edo believes tailoring solutions for each vertical is essential for the company’s success. “In Indonesia’s massively fragmented market, one solution cannot solve all industries and geographies because they have different problems, so to be very close to the customers and going hyperlocal is the key to winning the market,” Edo explained. 

The ability to address the specific pain points of different industries and customize offerings accordingly positions Jack as an adaptable partner for SMEs in Indonesia. Following the limited beta release and the subsequent public launch just two months ago, Jack has earned the trust of hundreds of corporate clients. 

Innovation plays a central role in Jack’s success. The company’s technology infrastructure, including in-house payment infrastructure and host-to-host connections with most banks, sets it apart from competitors that rely on third-party payment gateways. This technology ownership enables Jack to provide efficient and reliable financial services.

Looking ahead, Jack plans to further empower Indonesian SMEs by collaborating with stakeholders in different verticals. With a hyperlocal approach tailored to Indonesia’s specific needs, Jack remains a strong ally for SMEs navigating the complexities of modern business.