While COVID-19 is hitting businesses around the world, one company decided to fight back. Jason Thompson, the CEO of Indonesian digital payment platform OVO, told KrASIA that the firm has adopted a “war room” mentality—with the introduction of a dedicated task force to review its business strategy and optimize resource allocation.
However, Thompson believes that the crisis could push the adoption of mobile wallets and further increase people’s awareness of cashless payments. “We do expect an increase in reliance on digital payment platforms as more turn to e-payments for aid disbursements and to fulfill essential needs,” he said in the interview.
OVO’s long-term goal has always been to develop services to address gaps in the financial ecosystem and meet evolving consumer needs. “Indonesians are becoming more open to and reliant on digital services during this time and we hope that the financial landscape in Indonesia becomes less fragmented during COVID-19 and beyond,” he added.
KrASIA spoke to Thompson about the pandemic and OVO’s business in general.
KrASIA (Kr): How has the COVID-19 crisis impacted OVO’s business? Is OVO seeing a significant increase in transactions and the number of new users?
Jason Thompson (JT): With the onset of COVID-19, we’ve seen significant growth of more than 110% in online commerce, 15% in food delivery, as well as nearly 50% in lending disbursement. Our new users have grown 267% compared to the time before the social distancing and we are putting a lot of efforts in education and easing of first-time usage for digital payments and financial services.
We saw that consumers move their spending habits online and are adopting cashless payment methods to purchase essential needs. We’ve ramped up our efforts in extending the open-ecosystem strategy to adapt to consumer needs, focusing on how we enable e-commerce, food and grocery delivery, as well as telemedicine through our partnerships with Grab, Tokopedia, and others. We have also allocated dedicated resources to support Bank Indonesia and government initiatives in the fight against COVID-19. For example, our engineers have been part of the technical working group for the government’s pre-employment card initiative.
Kr: Speaking of the pre-employment card, how is the collaboration with the government benefiting OVO and the community?
JT: We truly see this as a social safety net program provided by the government to fight the COVID-19 impact. With the involvement of e-money providers, such as OVO, in the social aid disbursement, we cut layers of intermediaries that have been common in social assistance programs in Indonesia. We have been supporting the onboarding of new customers and seamless disbursement of aid to young job seekers and unemployed Indonesian citizens by enabling them to seamlessly activate an e-wallet, perform e-KYC, and receive the stimulus benefits without any physical interaction.
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All pre-employment card holders who choose OVO for incentive distribution have access to personal accident death and COVID-19 premium-free insurance provided by Prudential, by registering on the OVO app. Our engineers have been part of the technical working group. Five of them have been actively involved in the system development of the pre-employment cards, liaising directly with the Presidential Staff Office.
Kr: How is OVO helping small and medium enterprises who are heavily affected by the pandemic?
JT: OVO is facilitating cashless transactions for hundreds of local F&B and grocery merchant outlets through the launch of the “chat and pay” method that supports them in sustaining their business during social distancing. It enables users to purchase and pay daily necessities via chat and so help local merchants. We will continue to review our initiatives accordingly and will explore every effort possible to support our MSME partners and merchants during COVID-19 and beyond.
We are also planning to launch a feature to enable customers to make QR Indonesia Standard (QRIS) payments with MSMEs from the comfort of their homes. We are enabling businesses to manage payroll and incentive disbursement and are looking to introduce B2B and supply chain lending, with the objective to help SMEs sustain their cash flow.
Kr: One of OVO’s closest partners, Tokopedia, is allegedly a victim of a data breach which compromised data of millions of users. How do you ensure the safety of OVO’s customer data that is integrated into Tokopedia’s system?
JT: Cybersecurity is naturally a key factor to consider in our sector and OVO is no exception, especially given the sensitivity of online financial services. OVO and its data have not been compromised. Our layered security system enables us to protect users from cyberattacks, with security features including OTP, PIN and notifications if someone logs into the account on a different device. OVO is an independent organization with independent systems. We manage our own data privacy and information security, adhering to government regulations and global standards on data privacy and security. OVO’s commitment to ensuring data security is echoed throughout our ecosystem of partners, including Tokopedia.
Kr: What are the key learnings for OVO in light of COVID-19 and how to survive in a post-pandemic world?
JT: First, we are seeing a global pivot towards digitalization of businesses and digital adoption among consumers and we believe these shifts are likely to be permanent. Startups, therefore, need to leverage their flexible infrastructures to adapt swiftly and act decisively in the face of a crisis. Second, partnerships are key. Startups can play just as big a role as established entities through strategic partnerships with governments and other companies. Our partnerships with the Indonesian government have enabled us to play a bigger part in fighting the COVID-19 crisis.
Finally, we have to look inward as well, ensuring that our employees are well-supported. With remote working likely to be a norm for some time, we have been exploring a series of regular virtual engagements, such as virtual talk show sessions with public health experts, and town halls with key political and industry figures. We have also extended free telemedicine services to all OVO employees, to provide them with the tools and services to receive medical attention remotely, should they need it.
Kr: In our interview last year, OVO said it will focus in 2020 on lending, online investing, and digital insurance services. How is the pandemic affecting OVO’s plans and strategies?
JT: Our focus remains consistent, we’re looking to introduce more insurance and investment offerings for consumers, to strengthen our proposition to provide the most comprehensive suite of financial services to all Indonesians. Earlier this year, we announced a strategic partnership with Bareksa where OVO users can seamlessly purchase mutual funds through Bareksa. We have also partnered with Prudential Indonesia to launch premium-free personal accident death and COVID-19 protection, which can be accessed through the OVO app. The program has been running since mid-April and has been met with high demand from the public.
For consumer lending services, we are proactively taking steps to evaluate loan disbursement and repayment methods to protect our users and offer flexible repayment options. We are also actively investing in product and tech resources, particularly in teams for B2B lending, investment, and insurance, and we are establishing communication channels with regulators and the government to support various initiatives. We will have more to share on these products as they get closer to launch.
Kr: Facebook Pay is reportedly looking for a partner and OVO could be one of them. If it’s true, how would a partnership benefit OVO and how is Facebook Pay going to influence Indonesia’s mobile payment ecosystem?
JT: Although we are unable to comment on ongoing partnership discussions, we’re always open to exploring new opportunities to increase cashless transactions, including with Facebook or any other organisation. As an open ecosystem platform, we’re well-positioned to work closely with other industry partners to leverage our user database and services to support our customers, especially during times like these, where there is a global pivot towards cashless payments.
The interview has been edited for length and clarity.