Installment payments with a delayed payment or buy now pay later (BNPL) scheme have become one of the industries that has been growing since the COVID-19 pandemic hit. With growth opportunities still large, several players have begun to set strategies to increase their market share this year. One of them, Kredivo, which is one of the players in this industry with a wallet share of 50% in the majority of well-known e-commerce in Indonesia. Since late last year, Kredivo has increased its penetration to retail or offline merchants as people’s activities have started to return to normal as before the pandemic.
For example, they launched the Flexi Card, a card that allows users to transact at all merchants in Indonesia that have EDC with a GPN network using a card whose limit comes from the Kredivo application. With an interest of around 2.6% per month for 6 to 12 month installments, Indina Andamari as Kredivo’s VP Marketing & Communications said that he currently has 5 million active users in Indonesia, which has almost doubled in the last 10 months.
“The average user transacts 25 times using Kredivo every year, this shows how Kredivo has a high engagement rate for its users,” said Indina. Meanwhile, Indina said that his party will improve services in tier 3 cities and expand consumer targets to the productive sector so that residents in non-metropolitan cities and more MSME entrepreneurs use Kredivo’s services.
The hope is that the growth in the value of financing and the number of customers can double this year. Apart from Kredivo, there is also Akulaku, which has a high target after last year’s success in recording financing growth of 135% to Rp 9.5 trillion. This year, they are targeting the distribution of financing to reach Rp 12 trillion with products that have been superior, namely mobile phones and household appliances. President Director of Akulaku Finance Indonesia, Efrinal Sinaga, said that his party believed that e-commerce would still increase significantly in line with changes in people’s lifestyles who began to switch to online shopping accompanied by improved infrastructure and ecosystems.
Apparently, the paylater business is also being eyed by banks who also want to take advantage of this opportunity. For example, BRI has a product called Ceria for its paylater transactions. BRI Corporate Secretary Aestika Oryza Gunarto said that the paylater transaction experienced a significant increase because it grew more than 115% yoy with sales volume of transactions reaching Rp 230 billion. He also targets the growth of credit card and paylater transactions by 30% yoy by 2022.
Indeed, the growth may not be as big as the two previous fintechs. However, BRI seems to be superior to the interest rates offered, given the interest rate applicable to the CERIA product is 1.42% flat per month. “We will increase co-brand cooperation to serve various segments and increase more aggressive penetration as a digital lending product,” said Aes.
Apart from BRI, there is also Bank CIMB Niaga which is also looking at the paylater business which is currently being developed for its platform. Later, the paylater product will target CIMB Niaga savings customers who currently do not have the facilities or are not yet eligible for credit card products. Not without reason, Noviady Wahyudi as Head of Consumer Product, Preferred and Personalization of Bank CIMB Niaga sees this paylater facility as the most needed by the community. He also said that the loan ceiling provided would not be as large as the credit card ceiling and would be adjusted to the customer’s payment ability. “The interest given is of course still competitive so it will not burden customers,” said Noviady.