Indonesian online marketplace Tokopedia, one of the country’s unicorn startups is rolling out a partnership with mobile wallet developer Ovo today. Tokopedia’s “80 million monthly active users”, the companies said in a joint statement, will now be able to use Ovo’s wallet as a payment option on Tokopedia.
Ovo has a similar arrangement with ride-hailing and local services firm Grab in Indonesia.
Tokopedia’s moves in the cashless payments space have been under high scrutiny ever since the firm was forced to freeze its own mobile wallet TokoCash because of licensing issues. It seems to have put developing its own mobile wallet on the back burner for now — missing out on a potentially lucrative business.
Tokopedia’s decision to work with Ovo already leaked to the public a few days ago. News of this upcoming partnership gave rise to speculation that SoftBank, a major investor in both Grab and Tokopedia, along with Lippo Group, who invested in Grab and Ovo, had somehow engineered the deal.
Ovo CEO Jason Thompson counters this view. He said that “William and Patrick (referring to Tokopedia’s CEO and CFO, respectively) selected Ovo as a partner based on their diligence”. Thompson led GrabPay before taking the Ovo CEO role in Indonesia.
“We spent a huge amount of time inside of Tokopedia, winning hearts and minds, that’s been the process. It was a very local decision,” he told KrASIA.
Thompson stresses that Ovo is an independent entity that sees Grab and Tokopedia as two of many potential partners. “There’s no exclusivity in this”, he said.
In the last year, Ovo emerged as one of the popular mobile wallet apps, perhaps rivaled in scale at this point in time only by Go-Pay, the cashless payment system of Go-Jek. However, with Grab, Ovo, and Tokopedia aligning interests Go-Pay is starting to look a little bit isolated.
Ovo claims to be the largest cashless payments system in Indonesia by transaction value now. Lippo Group’s many retail outlets and properties have helped to quickly scale Ovo acceptance points across Indonesia. Ovo says it’s present in 90% of Indonesia’s malls. Thompson declined to share the number of daily transactions on Ovo, or how much cash a typical users keep stored on their Ovo wallets.
Being able to pay for ride-hailing trips and food delivery at Grab and for digital products such as cinema tickets, vouchers, phone top-ups, and of course, a vast array of physical goods at Tokopedia, all with the same e-cash, creates a cashless ecosystem that will ultimately support Indonesia’s transition to a less cash-dependent society, Thompson said.