Travel sector takes Indonesia’s BNPL industry on a joyride

The buy now, pay later industry in Southeast Asia may be suffering from a funding drought, but adoption in Indonesia is actually going up, with Indonesians using BNPL to pay for their food, makeup, and even travel.

Jakarta resident Dinda Pradipta is a regular user of SPayLater, Shopee’s BNPL service, because of the discounts offered on products like bags, clothes, and fashion accessories.

The 34-year-old psychologist admits to being “too lazy” to top up her ShopeePay e-wallet at times, which leads her to just using SPayLater instead. She also finds it “simpler” to pay her bills through the BNPL service, saying that such monthly installments “don’t feel like a burden.”

Photo credit: Joko SL / Shutterstock

Shopee’s rival Tokopedia also offers a BNPL service, both on its platform as well as on TikTok Shop, its venture with the short-video company. However, in its earnings call for the third quarter of 2024, Tokopedia’s management admitted that BNPL “will never be tremendously profitable.”

See also: Mapping the survivors of Southeast Asia’s BNPL funding drought

That said, the ecommerce platform pointed out that BNPL is still “a critical part of the portfolio” because it serves as “an acquisition tool and a customer engagement tool.” Its BNPL offering enables Tokopedia to bring in and retain customers within its ecosystem, giving the company the opportunity to sell other products such as cash loans.

Travel now, pay later

Aside from ecommerce, Indonesian businesses also see transportation and travel as promising sectors for BNPL products.

Traveloka, the country’s largest travel platform, offers a BNPL option – TPayLater – that provides a deferred payment feature for those purchasing tickets for flights, trains, buses, and tourist attractions.

Traveloka’s BNPL service / Image credit: Traveloka

Fellow travel booking platform Tiket.com has followed suit, offering a BNPL service in collaboration with fintech platform Indodana. It enables users to purchase flight tickets, train tickets, and hotel stays, among others.

Indonesians can even use BNPL to pay for their routine commutes. For instance, fintech company Kredivo recently launched a BNPL feature for the purchase of tickets in the Jakarta Mass Rapid Transit (MRT) system.

Lily Suriani, Kredivo’s marketing and strategy director, says the collaboration is part of the company’s effort to fulfill basic consumer needs, including in the transportation sector.

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