Virtual Accounts Dominate with 50% of Total Payment Volume, a 7% YoY Surge in Transactions

Virtual Accounts
Virtual Accounts Dominate with 50% of Total Payment Volume, a 7% YoY Surge in Transactions (photo: Envato Elements)

The digital landscape in Indonesia is witnessing a surge in popularity for online transactions, with virtual accounts emerging as the go-to platform for digital payments in 2023. These virtual accounts played a pivotal role, contributing a substantial 50% to the total payment volume (TPV) of national digital transactions last year.

According to the latest insights from Xendit Group, the transaction volume through virtual accounts exhibited a remarkable 7% year-on-year (YoY) growth.

Additionally, there was a notable fourfold increase in TPV for credit cards, driven by heightened usage within the travel and hospitality sectors. Xendit reported a 6% YoY uptick in QRIS transactions, amounting to a significant 20 million transactions.

Tessa Wijaya, the Co-Founder and COO of Xendit Group, highlighted the outstanding performance of the restaurant, travel, and hospitality sectors in terms of digital transactions.

“This sector recorded a transaction volume growth of 135% compared to the previous year,” noted Tessa in an official statement released on Thursday (1/2/2024).

When delving into the specifics of transaction volumes, the service sector emerged as the dominant player. Among Xendit Group’s merchants, the service sector notched up a remarkable 90 million transactions, primarily propelled by mobile transactions, financial services, and digital product purchases.

The prevailing trend is anticipated to extend its momentum until 2025, aligning with the projections within the banking sector.

Bank Indonesia (BI) anticipates a robust and rapid surge in digital transactions within the banking realm, both in 2024 and 2025. The projection suggests a noteworthy 23.2% growth in the value of digital banking transactions, reaching an impressive Rp71,584 trillion in 2024.

Looking ahead to 2025, digital banking transactions are expected to continue their upward trajectory with an 18.8% growth, reaching an estimated Rp85,044 trillion. For the ongoing year, the value of digital banking transactions is poised to hit Rp58,124 trillion, marking a substantial 10.6% growth compared to the previous year.

BI’s projections extend to the realm of electronic money transactions, foreseeing a value of Rp1,051.24 trillion in 2024, reflecting a robust YoY growth of 25.77%. In 2023, electronic money transactions had already seen a substantial surge of 43.45% YoY, amounting to Rp835.84 trillion.

Perry, during a press conference for the Board of Governors Meeting (RDG) on Wednesday (17/1/2024), emphasized the resilience of the digital economic and financial transaction landscape, attributing its strength to a secure, smooth, and reliable payment system.

However, amidst the rapid growth of digital banking transactions, the value of payments utilizing traditional methods such as ATM cards, debit cards, and credit cards experienced a slight decline of 0.81% YoY, reaching Rp8,178.69 trillion.

Perry further highlighted BI’s research findings, emphasizing that the digitization of the payment system has not only facilitated convenience but has also contributed to a reduction in inflation.

“The digitization of the payment system, including QRIS and BI Fast, has proven capable of reducing inflation, including core inflation,” affirmed Perry.