Indonesian digital payment platform Ovo is strengthening its presence in Indonesia while pushing its financial and insurance services, after officially confirming its “unicorn” status following months of speculation.
Earlier this month, Indonesia’s IT Minister Rudiantara announced that Ovo became the country’s fifth unicorn with a valuation of more than USD 1 billion, a statement that Ovo’s CEO Jason Thompson confirmed during his keynote session at the Tech in Asia Conference held in Jakarta last week.
Ovo is the second-largest digital wallet in Indonesia based on its monthly active users after Gojek, according to an iPrice Group ranking. The Ovo’s e-wallet is integrated into several digital platforms including Grab and Tokopedia.
The platform has turned two-year-old in September and it already saw impressive development. Thompson said that the platform is now available in more than 115 million devices and it has more active users than credit card companies in Indonesia.
Ovo’s partnership with mass adoption platforms like Grab and Tokopedia plays a crucial role in driving Ovo’s growth, Thompson said.
“Indonesia is a prominent country with a very complicated landscape, which is similar to China, and the most important lesson I’ve learned in the past two years is that building business in Indonesia is about localization. If you don’t do that, you wouldn’t be successful,” Thompson said.
Being in an open ecosystem will make digital payments become more inclusive, which is in line with Ovo’s mission from the beginning, according to Thompson.
“Critical problems in driving penetration for payments is device capacity, connectivity, and capability. Therefore, we took a very simple approach. We took payments and turned it into a service, we integrated that service from Know Your Customer (KYC) to retail transactions, and made it available through Grab, Tokopedia, and Ovo platforms,” he said.
Ovo has seen significant growth from May 2018 to August 2019 with 11.9 times increase in monthly active users, 27.7 times increase in annual transactions, 18.5 times increase in total payment value and 6.8 times increase in stored value facilities.
Thompson said that transportation transactions, food delivery, and e-commerce transactions drove Ovo’s usage and its basket size significantly. Meanwhile, its offline transactions with more than 500,000 modern and traditional retailers throughout the country also boosted Ovo’s wallet usage.
Financial services beyond payment
Beside its e-wallet transactions, Ovo is also addressing more financial services and investment products. Thompson said that although investment demand is high in Indonesia, the investment market in the country is still nascent and mutual funds penetration is still as low as 0.5%. To approach the investment needs, Ovo launched a service called Ovo Invest feature that offers equity funds investment.
The company is also partnering with local mutual funds provider Bareksa to offer mutual funds for investment products. As a pioneer in the field, Bareksa has 500,000 registered retail investors, 33 asset management partners, and 164 mutual fund products. By adding Bareksa into Ovo’s large and open ecosystem, more Indonesians will have the opportunity to tap into financial and investment services more conveniently, Thompson said.
Another Ovo’s financial product is Ovo PayLater, a service that lets users shop at various merchants and postpone the payment for thirty days after the initial purchase, without any extra charge. The company has also recently teamed up with British insurance company Prudential in June to add wellness, health, and wealth products and services on its platform.
Ovo’s Ceo added that his company will continue its mission to accelerate mobile payment and financial inclusion by providing a comprehensive suite of financial services. With its big data lake from Ovo, Grab, and Tokopedia platforms, Thompson said that Ovo will soon enrich its financial offerings with consumer lending, merchant lending, investment, and insurance.
Ovo’s Merger rumor
The company recently reported having a discussion for a merger with its competitor Dana to challenge Gopay’s domination in Indonesia’s multi-billion dollar online payments market. By joining forces, Ovo and Dana would have a better shot to lead the mobile payment industry, especially considering that Dana is an official e-wallet partner for Indonesia’s second-biggest e-commerce platform Bukalapak.
Both Ovo and Dana refused to comment on market speculation. However, with its positive development, it looks like Ovo has become more confident in bringing more innovations into the industry.
Disclaimer: KrASIA is a media partner of Tech in Asia conference 2019