QRIS and PayLater Dominate Payment Methods, Card Methods Falling Behind?

QRIS to Unveil a Range of New Features, Promising Increased Benefits and Power (photo: qris.online)
QRIS to Unveil a Range of New Features, Promising Increased Benefits and Power (photo: qris.online)

The wave of rapid digitalization is transforming every facet of Indonesian society, and the financial sector is no exception. Traditional financial transactions using ATM/debit cards and credit cards are increasingly being overshadowed by newer payment methods like QRIS and paylater. By May 2024, nearly all forms of digital financial transactions had demonstrated growth, with the notable exception of debit/ATM card payments.

In a recent study by Kredivo and Katadata Insight Center (KIC), it was revealed that the use of paylater services among online merchants has surged, overtaking traditional bank credit cards, which have seen a decline.

This comprehensive study analyzed online and offline transactions from over 2 million Kredivo users across 34 provinces in Indonesia during 2023. Additionally, an online survey was conducted with nearly 7,000 respondents between March 10 and April 7, 2024.

“Paylater has emerged as the second most popular payment method for online shopping, with its usage climbing to 70.5% in 2024, up from 69.4% in 2023. In contrast, credit card usage has dropped significantly from 15% in 2023 to just 9.5% in 2024,” the report detailed on Tuesday (June 25, 2024).

Read also: Banks in Indonesia Close 12,227 ATMs, Indicating Rapid Digitalization and Efficiency

Dominating the scene is the digital wallet or e-wallet, which remains the most widely used payment method for online shopping, capturing 74.1% of the market, up from 62.9% in 2023.

For offline merchant payments, cash still reigns supreme, contributing 66.6% to the total. Following closely are digital wallets at 56.1%, debit cards at 30.7%, bank transfers at 22.1%, credit cards at 13.6%, and paylater at 4.1%.

Additionally, the use of bank debit or ATM cards for digital transactions continues to decline as the adoption of the Quick Response Code Indonesian Standard (QRIS) skyrockets.

Bank Indonesia (BI) Governor Perry Warjiyo highlighted that the performance of digital economic and financial transactions in Indonesia remains strong, supported by a secure, smooth, and reliable payment system. QRIS, in particular, has shown significant growth. By May 2024, almost all digital financial transactions had grown, except for debit/ATM card payments.

“QRIS transactions grew by 213.31% year-on-year (YoY), with the number of users reaching 49.76 million and the number of merchants at 32.25 million. Meanwhile, ATM/debit card payments saw a decrease of 5.41% YoY, totaling IDR 615.18 trillion,” Perry announced during the RDG Press Conference on Thursday (June 20, 2024).

Despite some improvements from the previous month, ATM or debit card transactions continued to decline. In April 2024, debit card transactions had dropped by 12.49% YoY.

In contrast, QRIS transactions showed even greater growth compared to April 2024, with a year-on-year increase of 194.06%, boasting 48.90 million users and 31.86 million merchants.