Ovo went from loyalty app to a top e-wallet in Indonesia. Now, it’s evolving again

Ovo, the Indonesian e-wallet startup, started out as something different: a loyalty app. It was incubated and launched by the Lippo Group, a homegrown conglomerate with multiple property holdings (among other things), to target a very specific demographic: the shoppers roaming the almost 70 malls it owns across Indonesia.

But less than three years later, it has become one of the country’s leading e-wallets, competing neck and neck with Go-Jek’s Go-Pay. The company claims its app is installed in 115 million devices across Indonesia, and counts Asian unicorns Grab and Tokopedia as its partners.

And that’s just the start.

An Ovo booth at a mall in Jakarta / Photo credit: Ovo

While Ovo CEO Jason Thompson admits that “it’s been a relatively fast rise,” he points out that the company’s vision “has not just been about payments.”

With Indonesia’s vast underbanked population and cash-based economy, the company is setting its sights higher: financial inclusion.

Its biggest competitor: cash

At its core, Ovo is a mobile app that lets users make cashless payments (via “Ovo Cash”) at participating merchants. Users can also make transfers to bank accounts or other Ovo users, buy digital goods like phone credits, as well as make bill payments.

To top up their Ovo balance, users can either use bank transfers or go through Ovo’s merchant partners, which include the Alfamart convenience store chain.

These features weren’t available in late 2016, which was when Ovo first launched as a loyalty app. Incubated by LippoX, the Lippo Group’s digital arm, it was the conglomerate’s second high-profile foray into digital products. The first was the ecommerce platform MatahariMall.com, which fizzled as the likes of Tokopedia and Bukalapak became unicorns.

But as the problems of payments became more evident in the industry, Ovo started transitioning into becoming a digital wallet, says Thompson. It officially became one around August 2017, which was when it gained an e-money license from Indonesia’s central bank.

The license was soon followed by a US$116 million investment from Tokyo Century Corporation, a Japanese financial services company, in exchange for a 20% stake in Lippo-owned Bumi Cakrawala Perkasa, which in turn controls Ovo’s legal entity PT Visionet Internasional.

Ovo CEO Jason Thompson / Photo credit: Ovo

It also led to new partners for Ovo. While Go-Jek had gotten the same license for Go-Pay three years before Ovo did, many big tech companies in Indonesia still had problems securing it, including Grab and Tokopedia. That led to both companies partnering and integrating Ovo into their ecosystems: Grab officially came on board in mid-2018 while Tokopedia followed suit a couple of months after.

Payments are just the beginning