The Latest: Indosat Ooredoo Hutchison (IOH) has announced its collaboration with Setara Networks (Tara), the parent company of Singapore-based fintech firm Indepay, to launch zero-fee instant transaction features on the telco’s apps. We believe the latter service may further sideline commercial banks in Indonesia’s digital payments market, as quality of service (QoS), fee prices and partnerships with retailers become increasingly important to users.
Implications: Users will need to register their phone number to use the IOH-Tara instant-payment service at no cost on IOH’s Bima+ app. Bima+ is IOH’s lifestyle platform that hosts a variety of features ranging from SIM card top-ups to exclusive e-commerce deals with affiliated digital marketplaces such as Lazada. IOH also aims to bring instant-payment services to its other consumer app myIM3 in the near future.
The newly formed partnership with Tara will greatly improve IOH’s QoS on its lifestyle app, potentially attracting new users while further monetising existing ones. We expect the introduction of a zero-fee instant payment service to predominantly cater to users engaged in digital marketplace transactions. The total value of the Indonesian digital payments market grew to IDR160.1bn (USD10.2mn) at the end of July 2023, and the value of transactions executed in domestic online marketplaces accounted for approximately 24.4% of the latter figure.
