Go-Jek acquires payments startup as companies kick against sluggish regulators

Indonesia is still a largely cash-based society. New electronic payment systems are meant to change that. Photo credit: Bindalfrodo.

With Indonesia’s regulators moving slowly, some major companies are jostling to beat the lawmakers. One tactic seems to be acquiring startups to gain access to the digital payments-related tech they need.

Go-Jek – Indonesia’s ubiquitous ride-hailing app and first unicorn startup – has come to an agreement with MVCommerce, the company behind mobile payments service PonselPay, the latter company’s founder and CEO Hendra Sutandinata said.

“We did a strategic deal with [Go-Jek] to combine our respective strengths supporting the country’s financial inclusion efforts,” he told Tech in Asia. Go-Jek declined to comment.

Indonesia’s Go-Jek is best known for its motorbike-hailing service, which runs through an app. Photo credit: Go-Jek.

Emtek, the huge media conglomerate that operates Blackberry Messenger in Indonesia, is said to be in talks to acquire local payment gateway Doku, as reported by tech blog DailySocial.

“We can’t really confirm anything,” a Doku spokesperson told Tech in Asia. Adi Sariaatmadja, who heads Emtek’s digital division, is also evasive. “There are always rumors flying around.”

License to bill

The sudden appetite for fintech startups is most likely linked to licences.

Both Doku and MVcommerce have the right to issue electronic money sanctioned by Indonesia’s central bank, Bank Indonesia (BI). E-money is like Paypal or Kenya’s M-PESA system.

Only 21 companies in Indonesia hold an e-money license.

Combined with mobile payments, e-money is an essential tool for any company wanting to enable its users to seamlessly and instantly pay for goods and services online.

In Indonesia, only 21 companies have been issued an e-money license, and BI froze the issuing of new ones a while ago. The majority of those 21 are banks and telcos.

This makes smaller companies that already hold the license a hot commodity. Their acquisition might be a last resort for well-established startups in a rush to develop payments solutions.

The freeze