Strategy Note /

The Ultimate Guide to Indonesia fintech

  • Payments dominates Indonesia's fintech landscape, with over 40% of all firms. Transaction volumes are growing fast

  • Indonesian fintechs saw a big increase in investment in 2022, a sharp contrast with the slowdown seen elsewhere

  • Success factors: Innovation, user-friendliness, large user base. Strategic priorities: new markets, funding, efficiency

The Ultimate Guide to Indonesia fintech
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Tellimer Research
30 January 2023
Published byTellimer Research

Southeast Asia's largest economy is also one of the biggest fintech hubs in the region. Payments fintechs form the largest component within Indonesia’s fintech ecosystem, with almost double the weighting of the next biggest sector, Lending. Looking at recent trends, Investech and Blockchain are becoming more important constituencies, while Lending’s share is falling.

Our database of over 200 Indonesian fintechs within 3,400 global emerging market firms helps us position the country in a broader EM context. Indonesian fintechs are enjoying faster growth in user numbers and revenues than their EM peers. In contrast, their operating profit, operating margin, and average revenue per user trends are inferior to those seen elsewhere. While just 37% of local fintechs are profitable, 50% expect to move into the black over the coming year.

The main factors Indonesian fintechs credit for their success to date include innovative service offerings, user-friendly platforms, access to funding, and a large customer base. The top values they offer include transparency in pricing and services, fast approvals, security, and unique offerings. They are targeting product/service innovation, increasing customer loyalty, and the number of users as key performance indicators.

Strategic plans include expansion into new markets, raising funds for growth, and improving operating efficiency. Targeted innovations focus on chatbots and virtual assistants for customer education, using technology to reduce frauds and defaults, and easier customer onboarding.

Indonesian fintechs cite their biggest competitive threats as other fintechs and traditional financial institutions. They are also increasingly facing competition from international fintechs branching out from their home markets. For example, Dana, one of Indonesia’s largest mobile wallets, is backed by China’s Ant Group.

The main growth constraints for Indonesian fintechs are the size of the market, competition from fintechs and other financial institutions, and regulations, which have been tightened. Cryptocurrency rules, consumer protection, and taxation are the largest regulatory hurdles Indonesia fintechs face.

In this report, we take a detailed look at the Indonesian fintech landscape, including:

  • The current state of the fintech ecosystem

  • Fintech funding trends

  • Electronic payments statistics

  • Key industry growth trends

  • Fintech profitability versus EM peers

  • Financial services provider market shares and expected three-year changes

  • The key performance indicators fintechs are targeting

  • The competitive environment

  • Fintechs’ values and success factors

  • Fintechs’ plans and targeted innovations

  • Fintechs’ growth constraints and regulatory hurdles

We also compare our current findings with those from our 2020 industry survey and highlight five Indonesian fintechs to watch.

Payments captures the biggest slice of the Indonesian fintech landscape

Payments dominates the Indonesian fintech ecosystem, with 42% of all firms focused on this segment (versus a global EM average of 26%). The proportions of Indonesian fintechs focused on other major products areas, such as Lending, Insurtech, Investech, and Blockchain, are similar to global EM averages. However, there is much less diversity in Other areas, such as financial software solutions, taxation, real estate, financial research, and crowdfunding.

Mapping Indonesia's fintech ecosystem

If we compare our current survey with that carried out in 2020, the biggest growth areas for Indonesian fintechs include Blockchain and Investech. In contrast, the proportion of firms specialising in Lending has dropped from 35% to 22% of the sample. This could be due to increased scrutiny of Indonesia’s Financial Services Authority (OJK), which for example revised P2P Lending regulations from July 2022, raising the minimum paid-up capital requirement for P2P lending fintechs tenfold, from US$160,000 to US$1,600,000. Penalties for non-compliance include the limitation of business activities and/or licence revocation.

Change in sector weights since our 2020 survey


Investment into Indonesian fintechs accelerated in 2022, bucking the global trend

According to Fintech Global, Indonesian fintechs secured US$1.6bn funding in 2021, compared to US$0.5bn in 2020 and US$0.7bn in 2019. In contrast to the lower funding volumes we have seen in most other markets in 2022, investment into Indonesian fintechs increased. Funding totalled US$2.1bn in 9M 2022, above the full-year 2021 figure.

Some of the biggest fintech investments in that period include: Xendit, a payments fintech unicorn, which raised US$300mn in Series D funding, led by Coatue and Insight Partners; and Dana, also a payments fintech, which raised US$250mn at a US$1.2bn valuation in a round led by Sinar Mars Group.

Fintech investment activity in Indonesia

Indonesia's digital payments industry is on a steep upward trajectory

The value of digital payments transactions in Indonesia has increased by 71% CAGR over the past five years, reaching IDR331tn in 2021 (US$21.2bn). The volume of transactions has risen even faster (124% 5-year CAGR), hitting 698mn in 2021. The average transaction size has thus declined from US$117 in 2016 to US$31 in 2021 as digital payments are increasingly used for everyday transactions.

For 2022 (annualised, based on 9M data), the value of transactions increased 70% to IDR564tn (US$35.9bn) and volume increased by a whopping 160% to 1,818mn transactions (versus 2021). During this period, transaction size has fallen further, to US$20. This shows that in 2022 digital payments have seeped further into daily life.

In December 2021, Bank Indonesia initiated BI-FAST, which is a payment infrastructure accessible via existing payment applications to facilitate real-time retail payment transactions, which should further help to grow the digital payments pie. According to Statista, the most used e-wallet apps in Indonesia in July 2022 were GoPay, Dana, OVO, and ShopeePay.

Indonesia online payments statistics

Indonesian fintechs are experiencing faster top-line growth but at lower margins

Our detailed study of 215 fintechs across 14 emerging markets enables us to draw out key differences at the sector and market levels. Indonesian fintechs are enjoying faster growth in the user base than their EM peers. According to Fintech Global, BRI mobile (BRImo), an internet and mobile banking application, was the most cumulatively downloaded fintech app in Indonesia with 17.1m downloads from Q3 2021 to Q3 2022.

Growth in user numbers is also supporting above-average revenue growth. In contrast, operating profit, operating margin, and ARPU trends are inferior to those seen in other emerging markets. From this perspective, Indonesian fintechs may be better aligned with the investment goals of growth-oriented investors with long-term horizons.

Fintech growth: Indonesia versus global emerging markets

Only 37% of Indonesian fintechs are profitable but this should more than double next year

Approximately 37% of our surveyed Indonesian fintechs claim to be already profitable, which is below the 60% global emerging markets average but better than the 13% figure in our 2020 survey.

Almost half of Indonesia’s fintechs expect to move into profit in the coming year, a much swifter transition than in most of our other surveyed emerging markets. According to Asian Banker, out of the 181mn adult population, 51% are unbanked and 26% are underbanked. This provides plenty of growth headroom for Indonesian fintechs.

Fintech profitability: Indonesia versus global EMs

Consumers see Indonesian fintechs gaining share in life/health insurance

We asked 900 consumers in 14 emerging markets about the types of providers meeting their current financial services needs, and those they expect to use in three years. This data allows us to estimate the current market share of the different industry players and likely future shifts.

Currently, fintechs have a 39% market share in Indonesia versus 10% in 2020. The increase has arisen via better financial inclusion and some market share gains from incumbents. However, over the next three years, consumers do not expect much of a change in the market shares of various provider types; fintechs are expected to gain only around 2% points of market share, largely through better financial inclusion.

Note that the survey responses are unweighted; we think traditional financial institutions would have a much higher share if our survey were value-weighted.

Financial services provider market shares in Indonesia

Based on our survey, products where Indonesian fintechs are already industry leaders include mobile payments, current accounts, domestic money transfers and international remittances. The largest increases in fintech market share over the coming three years are projected for life/health insurance, business/property loans, mutual fund/equity investment and general insurance. In contrast, fintechs are expected to lose market share in personal/ vehicle loans, domestic money transfer and mobile payments while their presence in international remittances could remain stable.

Indonesia fintech: market share by product

Targeted KPIs: Product/service innovation, customer loyalty

According to Indonesian fintechs, their most frequently targeted KPIs are product/service innovation and customer loyalty. In contrast to fintechs in other emerging markets, those in Indonesia are more focused on product and service innovation, top-line growth and brand strength and less focused on transaction value, gross margin, and the number of active users.

In our previous survey, product/service innovation, customer loyalty, and transaction value were the top targeted KPIs. The focus on all three has lessened; while transaction value is no longer a top 3 category, the other two KPIs remain important. Areas that have gained importance since 2020 include top-line growth, brand strength/reputation, and bottom-line growth.

Product and service innovation

Product and service innovation enables fintechs to reach their customers more cheaply and effectively. It also helps fintechs to be more relevant to their customers, for example by offering them greater convenience and/or a better user experience. Indonesian fintechs citing product/service innovation as a KPI include Mapan (Lending) and Bareksa (Investech).

Customer loyalty

It is helpful for fintech to build trust and create emotional bonds with their customers, leading to a higher share-of-wallet and higher margins. Indonesian fintechs targeting customer loyalty include Payfazz (Payments) and KoinWorks (Lending).

Indonesia fintech: Targeted KPIs

The competitive landscape for Indonesian fintechs

Indonesian fintechs regard other fintechs and traditional financial services firms as their strongest competitors, followed by media firms. Meanwhile, family/friends are not viewed as much of a concern. This represents a major shift from our previous survey, where the informal sector and formal financial institutions were regarded as the biggest competitors.

The elevation of other fintechs to the main competitive threat is in line with the global experience and highlights the intensifying competition from the growing number of homegrown and international firms operating in Indonesia.

Indonesian fintechs' main competitors

Indonesian fintechs' customer value proposition: Transparency tops the list

Indonesian fintechs believe the key values they deliver to their customers, in their view, are transparency in pricing and services, security, unique offerings, and fast approvals. Relative to fintechs in other emerging markets, those in Indonesia are more focused on delivering transparency in pricing and services and low product costs, while less importance is assigned to seamless execution and user-friendly platform.

In our previous survey, customer responsiveness, and convenience were the top values provided by fintechs. In comparison with that survey, Indonesian firms now give more importance to low product costs and transparent pricing and are giving less weight to convenience, responsiveness to customer needs, and company brand and affiliation.

Transparency in pricing and services

Transparency helps build trust and set realistic expectations, thus boosting customer retention levels. Indonesian fintechs citing this as a key customer-value proposition include Pundi (Blockchain) and Tunaikita (Lending).


Security is a major value for financial services (notably payments). Fintechs that have regarded security as a key value is (Payments) and Nucleus Software (Software solutions).

Fast Approvals

The faster the process of customer onboarding and risk categorisation, the more likely it is that the consumer will start using the service. This explains why some fintechs, such as Crowdo (Lending) and ShopeePay (Payments) focus on this aspect.

Unique offerings

Innovation is a keyway for digital financial services to compete with incumbents, or to attract financially-excluded customers. Fintech offerings can be designed to provide convenience, customised services, low pricing or other factors that customers value. Fintechs that cite unique offerings as a key fintech value include Mapan (Lending) and Jurnal (Investech).

Indonesia fintech: Customer value proposition

Key success factors: Large customer base, innovation, funding, user-friendliness

The factors Indonesian fintechs credit most for their success include a large customer base, innovation, access to funding, and user-friendliness. In contrast to fintechs in other emerging markets, those in Indonesia are more likely to cite a large customer base, strategic partnerships and access to funding as success factors, and less likely to mention fast transaction speeds, targeting financially-excluded customers and strong management.

In our previous survey, Indonesian fintechs cited innovative service offerings, funding access, and strategic partnerships as the top success factors. Having a large customer base has gained relevance, while the importance attached to targeting financially-excluded customers and innovative service offerings has declined significantly.

Large customer base

Building a strong customer base is incredibly important to fintechs. Having a large customer base validates a firm’s marketing strategy and shows that products are meeting customers’ needs. Firms that see this as their key success factor include Tunaikita (Lending) and Futuready (Insurtech).

Innovative service offerings

Innovation is a key pillar for fintech success. It can, for example, allow fintechs to improve their service offerings and enhance the consumer experience. Innovators include Payfazz (Payments) and Jurnal (Investech).

User-friendly platform

Firms benefit from presenting an easy-to-use, seamless interface. Firms citing this as a success factor include Blocktech (Blockchain) and Eidupay (Payments).

Access to funding

Without access to funding, fintechs will not be able to realise their full growth potential. Indonesian fintechs citing this as a success factor include Bareska (Investech) and Crowdo (Lending).

Indonesia fintech: Success factors

Future plans: Operational efficiency, new markets, raising funds for growth

Indonesian fintechs' top strategic priorities are improving operational efficiency, expanding into new markets, and raising funds for growth. Relative to other emerging markets fintechs, those in Indonesia are more likely to target operational efficiency, expansion into new markets and promotion of in-house innovation. They are less focused on introducing new products/ services, increasing use-cases of existing products/services and raising technology investment.

In contrast to our previous survey, the strategic priorities of Indonesian fintechs have shifted from introducing new products/services, entering new customer segments, and increasing technology investment towards increasing operational efficiency, raising funds for growth, and enhancing management expertise.

Boosting operational efficiency

Efficient operations allow companies to boost their bottom line and enable competitive product pricing, thereby growing the addressable market. Indonesian fintechs targeting operational efficiency include Mapan (Lending) and Paper.Id (Payments).

Expanding into new markets

This helps fintechs to gain economies of scale, diversify their operations, and build competitive advantages. Firms that cite this as a key success factor are Bareska (Investech) and Payfazz (Payments).

Raising funds for growth

This can help with the operational side of the business (for example, hiring talent or building systems), can turbocharge growth via marketing or promotional activity, or can fund mergers and acquisitions activity. Firms that have fundraising in their plans include KoinWorks (Lending) and Crowdo (Lending). 

Indonesia fintech: Strategic priorities

Targeted innovations: Chatbots, fraud reduction, customer onboarding

The top three innovation areas that Indonesian fintechs target are chatbots, developing technologies to reduce fraud innovations, and easier customer onboarding. In contrast to those in other emerging markets, Indonesian fintechs are more focused on chatbots and virtual assistants, and using technology to reduce fraud, and less keen on developing augmented reality, quantum computing and blockchain technology.

In our previous survey, artificial intelligence, chatbots and virtual assistants, and cloud technology topped the targeted innovation areas for Indonesian fintech. There is now more focus than in the past on easing customer onboarding, while artificial Intelligence and cloud technology are less important than in our previous survey.

Chatbots and virtual assistants for customer education

If executed well, chatbots and virtual assistants can improve the customer experience by automating customer service/education, simultaneously allowing fintechs to reduce their operating costs by limiting the staff required to handle customer queries. Firms with plans in this area include Sikatabis (Other – comparison service) and EiduPay (Payments).

Using technology to reduce fraud and defaults

Modern technology can reduce fraud by automating data capture, making it easier to track money flows. Firms that cite this as targeted innovation are ShopeePay (Payments) and Nucleus Software (Software solutions).

Using technology to ease customer onboarding

Partly for regulatory reasons, customer onboarding has traditionally been a lengthy exercise. Any complexities or difficulties in customer onboarding can lead to bad first impressions, resulting in lower business volume and less customer loyalty. For these reasons, Indonesian fintechs such as Jurnal (Investech) and Crowdo (Lending) are targeting improvements in this area.

Indonesia fintech: Targeted innovations

Key growth constraints: Size of the market, fintech competition, regulations

The top constraints to growth cited by Indonesian fintechs are the size of the market, fintech competition, and regulations. Compared to firms in other emerging markets, they are more concerned about the size of the market and competition from the informal sector, but funding/capital is less of an issue for Indonesian fintechs.

In contrast to our previous survey, competition from fintechs and other financial institutions, and the long-term effects of Covid-19, have become more important business constraints, while the informal sector, distribution capacity, and the size and growth of the market are now less of a concern.

Size of the market

It can be difficult for industry leaders to outgrow the overall market, particularly as the number of competing fintechs rises. Firms that cite market dynamics as a growth constraint include Eidupay (Payments) and Pundi (Blockchain).

Competition from fintechs

Fintech start-ups face many challenges. Incumbents are actively developing digital products, often in partnership with fintechs. Meanwhile, standalone fintechs are also ratcheting up the competition. Indonesian firms citing competition from fintechs as a growth constraint include Futuready (Insurtech) and Bareska (Investech).


Fintech operations differ considerably from those of incumbents and rulebooks are being continuously updated as regulators catch up with the pace of innovation. Regulatory oversight also tends to rise as fintech firms grow larger. As a result, fintechs are often subject to considerable regulatory uncertainty, which can act as a barrier to investment and growth. Indonesian fintechs that regard regulation as a growth constraint include Gojek (Payments) and Blocktech (Blockchain).

Indonesia fintech: Growth constraints

Fintech regulatory hurdles: Cryptocurrency regulations, consumer protection regulations, taxation

The biggest regulatory hurdles for Indonesian fintechs, in their view, are cryptocurrency regulations, consumer protection regulations, and taxation. Relative to fintechs in other emerging markets, cryptocurrency regulations, taxation, and partnership agreements are bigger issues, while KYC/AML laws, data protection regulations, and capital requirements are less severe matters.

In our previous survey, deposit insurance, data protection regulations, and consumer protection regulations were the main regulatory hurdles for Indonesian fintechs. Taxation and restrictions on pricing have become more important regulatory constraints on Indonesian fintechs, while deposit insurance, data protection, and disclosure requirements to investors/lenders have become less problematic.

Cryptocurrency regulations

The use of cryptocurrency to make payments is illegal in Indonesia but transactions of investments are allowed in the commodities markets. Firms that cited this as a hurdle are Blocktech (Blockchain) and Pundi (Blockchain).

Consumer protection regulations

These regulations can impose additional restrictions on how a business can operate and firms may need to pay penalties for customer grievances. Indonesian firms that face this hurdle are Mapan (Lending) and (Payments).


Taxation can have two impacts on fintechs revenue, they obviously lead to a reduction of net profit and can also reduce the quantity of service offered to consumers as it may increase the price of the service to the consumer. Firms citing this as a hurdle are Sikatabis (Other – comparison services) and ShopeePay (Payments).

Indonesia fintech: Regulatory hurdles

Five Indonesian fintechs to watch

Ajaib (Investech)

Ajaib targets millennials by making investing simple and quick. It allows customers to invest small amounts and charges lower fees than competitors, thus boosting financial inclusion. Ajaib claims to be the country’s third-largest brokerage by number of transactions. It joined the unicorn club in October 2021, with total funding of US$243mn. Notable investors include DST Global, Ribbit Capital, ICONIQ Capital, and IVP.

Dana (Payments)

Dana hosts a digital wallet and also provides payment infrastructures, allowing customers to make e-commerce purchases. For merchants, a key attraction is easy customer onboarding. The firm was founded in 2017 and the app was launched in 2018. In 2021, the company claimed a user base of 115mn and an average of 10 million transactions per day. It was Indonesia's most downloaded finance app that year.

Gojek (Super App)

Founded in 2010, Gojek has raised total funding of US$5.3bn over 13 rounds. This funding allows the firm to support a large variety of services like payments, food delivery, transportation, shopping, hyper-local delivery, and logistics. Gojek also operates in other regional markets such as Vietnam and Singapore. It is part of the GoTo Group, the largest digital ecosystem in Indonesia, consisting of Gojek, Tokopedia (an e-commerce company), and GoTo Financial (which provides technological tools for consumers and merchants).

OVO (Payments)

OVO is a digital wallet application that makes it easy for users to make cashless transactions. OVO collaborates with 200,000 small and medium-sized enterprises across Indonesia. The firm’s service coverage has expanded to include pay later and business capital loans. It has a valuation of around US$2.5bn.

Xendit (B2B Payments)

The Indonesian B2B payments industry is dominated by Xendit, which has achieved unicorn status. It is known for its simplicity and world-class customer support. Xendit enables businesses to accept payments in various methods including direct debit, virtual accounts, credit and debit cards, e-wallets, retail outlets, and installments. The firm also operates in the Philippines.

Acknowledgements: The authors thank Rohit Kumar and Rabail Adwani for their assistance with this report