A new point-of-sales race is brewing in Indonesia

Despite the growing popularity of online transactions in ecommerce platforms like Tokopedia and Bukalapak, around 96% of total transactions in Indonesia still happen offline.

To handle offline transactions, large companies may use a cash register software that has to be installed on-site. Meanwhile, most of the country’s small and medium-sized enterprises still rely on traditional pen-and-paper methods to record transactions.

This led to the rise of mobile point-of-sales (PoS) startups like Moka and Pawoon about five years ago. Using just a smartphone or tablet app, merchants can record transactions, accept online payments, manage inventories, run analytics, and produce reports. Users pay a monthly or yearly subscription fee for this service.

However, these pioneers are facing new challenges: Startups that develop their own PoS systems and offer them to their respective ecosystems.

Jakarta-based unicorn Tokopedia, for example, has built its own PoS software and is offering it to some of its sellers. With this product, the company can get data from the online transactions taking place on its platform as well as from the offline transactions of those sellers. However, Covid-19 forced Tokopedia to put the development of the product on hold, opting to focus on its core ecommerce business instead, a spokesperson told Tech in Asia.

Payfazz, an agent-based payment company, has developed two PoS systems. One is a feature that was added to its agents’ app and the other is called Post, which is aimed at offline merchants.

Warung Pintar, a startup that wants to transform mom and pop stores across the country into smart kiosks, used to provide stall owners with Moka’s PoS software. However, it soon realized that the product didn’t suit warung owners, who are generally not tech savvy.

Moka’s PoS “was too sophisticated, so we decided to build a simpler PoS by ourselves,” says Agung Bezharie, chief executive of Warung Pintar.

Since these newcomers can offer their products at lower prices or even for free because they have other revenue streams, pure-play PoS companies may face tougher days ahead. Covid-19 is also a cause for concern, given how majority of their clients are in the retail sector and the food and beverage industry, which have been hit hard by the pandemic.

Only a catalyst

PoS software is not rocket science, says Michael Liem, CEO of Indonesian PoS startup Qasir. The platform can be easily copied, and its main function hasn’t really evolved since the era of its offline cash register predecessors, he says.

What’s changed with cloud-based PoS systems is their “integration with payment, stock replenishment, and procurement” services, observes Liem.

While other PoS systems charge a subscription fee, Qasir’s product is free, with users paying only for extra features.

The company also gets additional revenue from helping merchants buy goods and apply for loans. However, the amount is not significant, Liem says.

Fragmented market

New opportunity