This startup is solving Indonesia’s mobile payments problem, bypassing banks altogether

Hendra Sutandinata, Founder and CEO of MVCommerce.

Indonesia is a country where 12.5 percent of the population lives below the poverty line and nearly one third of locals don’t have access to traditional bank accounts. However, there is one thing that even the poorest people in the country do have access to: mobile phones. For this reason, the implications surrounding PT MVCommerce and its flagship product PonselPay are monumental for Indonesia. “We deal with banking and payment transactions using mobile phones,” explains Hendra Sutandinata, founder and CEO of MVCommerce. “PonselPay is connected to all the bank accounts in Indonesia.”

ATM transfers without the ATM

In a nutshell, PonselPay is unlike online bank transfers because it uses Indonesian telcos as the vehicles for payments, and the service is simply an “open platform.” This means anyone can use it to transfer funds to anyone else regardless of the bank they use or the kind of account they have. If both parties have PonselPay, neither one even actually needs a bank account for the transaction.

In addition, the service doesn’t involve merchant fees like the ones often found in online transactions. With this in mind, PonselPay can circumvent the costs and complications associated with all other digital money transfers in Indonesia, making it a truly disruptive technology and a viable competitor to services like Mandiri E-cash or Rekening Ponsel.

See: Lifestyle guide: be a cashless society with Mandiri E-Cash

Sutandinata gives the following example of how PonselPay might provide benefits to Indonesians who survive on low wages:

Let’s say your maid must go to the bank and transfer money to her family. First she must take an ojek (motorcycle taxi), which costs money, then she must pay the RTGS fee which is Rp 25,000. If the relative has no bank account then she must go to the post office, and then the post to transfer money is Rp 22,000. With PonselPay, she can just transfer directly without having to deal with any of that.

A long-term hustle

According to Sutandinata, MVCommerce has actually been around since 2001, and PonselPay was created as far back as 2007. He says, “We’ve been working on it this whole time. It has taken that long, seven years. You can get a Bachelor’s and Master’s degree in that time period.”

Sutandinata cites lengthy and painful procedures involved with Indonesian bank regulations, formal agreements with telcos, ensured user protection clauses and cultivating the overall legal framework as the primary obstacles in the way of PonselPay embedding itself into Indonesian society on a large scale.

PonselPay is readily available on major Indonesian telcos XL Axiata and Esia, but a deal with Indosat has been put on hold.

So where’s the money?