‘Future of payment’: Bank Mandiri to issue 400,000 contactless cards in 2020

first_imgState-owned Bank Mandiri has targeted to issue 400,000 contactless cards this year as consumer preference is tending toward contactless payment options amid the pandemic, the bank’s executive has said.Bank Mandiri credit card group senior vice president Lila Noya said the bank had issued some 250,000 Mandiri Visa contactless cards, up more than 100 percent year-on-year (yoy), so far this year. “We think contactless payment is the future of payment. Things are certainly heading in that direction,” Lila said during a virtual press conference on Thursday. She added that the source of growth could come from new applicants or existing applicants who wanted to extend their cards, whose old cards the bank would automatically replace with a contactless one. Read also: Bank Mandiri provides open banking API for e-commerce, fintechContactless cards allow consumers to carry out transactions without needing to hand over the card to a shopkeeper as payment will immediately be processed when the card is within close range of a merchant’s electronic data capture (EDC) machine. Lila said such a method was preferred as consumers had adapted to new health protocols.In a 2020 report titled Digital Consumers of Tomorrow, Here Today commissioned by Facebook, global consultancy firm Bain & Company found that Southeast Asian consumers were embracing contactless payments as preference for e-wallets grew at the expense of cash payments. The report shows that despite still being the most popular payment method, preference for cash decreased by 6 percentage points with only 34 percent of consumers preferring the payment method in 2020, down from 40 percent in 2019 — the steepest drop among other surveyed payment methods. Credit and debit cards, being the second-most-preferred payment method, also saw a slight drop in popularity, with 22.7 percent of consumers saying it was their preferred way to pay in 2020, down by 0.3 percentage points from 23 percent in 2019.The only payment option to book a growth was e-wallets, which saw their popularity increase by 8 percentage points, with 22 percent of consumers saying they preferred e-wallet payment in 2020 — almost equal to the proportion of those who preferred credit and debit cards. Read also: Visa says tokenization key to e-commerce security“What we are doing is we are really speeding up [the adoption process], as we have learned a lot from other countries. There is a big chance we can catch up,” PT Visa Worldwide Indonesia president director Riko Abdurrahman said during the press conference.He explained that there were two aspects that needed to grow side-by-side in the process of increasing the use of contactless cards in Indonesia: issuance and acceptance. Old cards need to be replaced with contactless cards, while point-of-sale terminals that accept contactless cards need to be available in all merchants. “If both go hand-in-hand, then the penetration of contactless transactions in Indonesia will accelerate exponentially,” Riko added.In comparison to its regional peers, the current usage of contactless cards in Indonesia is still fairly low.According to Visa’s 2020 report titled The Fourth Payment Revolution: Moving from Transaction to Action, only 34 percent of Indonesian consumers use contactless cards, significantly lower than the adoption in Singapore at 84 percent. Meanwhile, the current usage of credit and debit cards stood at 71 percent for Indonesia and 89 percent for Singapore. Read also: Indonesian banks’ results reflect deteriorating assets, but hopes remain: ExpertsBut Indonesians are optimistic about the future of cashless payments, with 73 percent of Indonesian consumers expecting their use of cashless payments to increase in the next 12 months, the report shows.“Once they’ve formed a cashless habit, the habit is likely to stick,” Riko said, citing a Kantar study showing that 62 percent of the surveyed Indonesian consumers said they would stick to electronic payment methods instead of going back to cash when the pandemic was over. “We see this as a business opportunity to increase transactions especially in merchants where the value of transactions is relatively small but the frequency is high,” Lila of Bank Mandiri said. The Mandiri Visa card allows the tap-and-go payment option for transactions equal to Rp 1 million or less, she mentioned.Topics :last_img

Leave a Reply

Your email address will not be published. Required fields are marked *