Go-Jek Buys 3 Fintech Firms to Boost Payments Services
Can Go-Jek replicate Alibaba’s strategy in Southeast Asia?
PHOTO CREDIT: Getty Images
Go-Jek, Indonesia’s on-demand mobile services and payment platform, has reached deals to acquire three local fintech firms in its bid to dominate the fast-growing payments market.
The companies set to join Go-Jek’s fold are: Kartuku, an offline payments processing company; Midtrans , an online payment gateway, and Mapan, a local community group-based saving and lending network.
The acquisitions are expected to yield an inclusive payment ecosystem for financial institutions, enterprise, and SME merchants, as well as banked and unbanked customers, announced the company. The deals will also expand the use of Go-Jek’s payment service GO-PAY.
To be sure, this recent development will boost Go-Jek’s mobile payments strategy in Indonesia. But it must move fast and smart, especially as Jack Ma’s Alibaba Group secures its foothold in Southeast Asia’s digital payments landscape.
In November 2016, Ant Financial, the payments arm of the e-commerce behemoth, invested in Thailand’s Ascend Money; in February 2017, Ant acquired a stake in Mynt, a Philippine-based digital payments and lending platform under Globe Telecom; and in April entered into an agreement with Indonesia’s Elang Mahkota Teknology (Emtek Group) to provide payments to the BlackBerry Messenger service.
China is one market where there is massive mobile payment adoption. Data from iResearch shows that the value of China’s mobile payments market reached 38 trillion Yuan or $5.6 trillion in 2016. Almost everyone in major Chinese cities uses smartphones to pay for just about anything, says a New York Times article.
By applying strategies that worked in China, Ant Financial is enabling local players to succeed.
For instance, the reverse QR mode of payment—where users can scan a merchant’s QR code and send payment—was recently launched in the Philippines through a new payment system that makes use of Globe’s existing mobile wallet GCash. As Alibaba’s executive chairman, Ma himself was present at the launch.
Merchants, including street vendors, can receive cashless payments without the need for a point-of-sale terminal or other expensive equipment. Instead, they only need a sticker with a QR code to accept payments through GCash.
Early in December, Go-Jek’s chief technology officer (CTO) announced that the company plans to set up operations in the Philippines in 2018, with other Southeast Asian countries to follow later that year.
In a Reuters report, Ajey Gore said that his team would test some of Go-Jek’s core services, such as transportation and then payments “just to pilot it, learn from mistakes.”
The ride-hailing platform has come a long way since it was co-founded by Nadiem Makarim in 2011. It has evolved into a multi-platform tech company, with 15 million weekly active users, 900,000 drivers, over 125,000 merchants, and 100 million transactions processed through its platform per month, according to company data.
“You have to believe that every single transaction that a customer will do in the next three to four years will go through their smartphone,” CEO Makarim said in a previous interview with Inc. Southeast Asia.
Today, the company is seeking to fulfill every conceivable consumer need—from ridesharing, food delivery, logistics, and payments.
“Our objective is not to conquer the world,” Makarim said in the June cover story of Inc. Southeast Asia, “Our objective is to conquer the user.”
Whether they will go head to head with Alibaba in conquering the digital payments space, fintech watchers will just have to wait and see.