The Current State of Cashless Payments in Indonesia – The Penetration of Cashless Apps into Society

In Indonesia, cashless payments have rapidly developed, and a lifestyle without using cash is becoming more common. This article will provide a detailed explanation of the types of major cashless payment apps in Indonesia, their market share, the spread of cashless adoption and its impact, as well as the convenience and challenges involved. It will also delve into the acceptance by stores and consumers, the reality of fraudulent activities, government policies, and future prospects. If you want to understand the current state of Indonesia’s cashless society, please read through to the end.

 

 

Cashless Payment Apps and Market Share in Indonesia

In Indonesia, electronic money and cashless payment apps have rapidly spread, with major platforms leading the market. Especially popular are apps like GoPay, OVO, DANA, and ShopeePay, each offering unique services.

Overview of Major Cashless Payments Apps

GoPay (by Gojek)

GoPay was introduced in 2016 as part of the major ride-hailing service Gojek and was initially used as a payment method for ride-sharing and food delivery. However, it is now one of the largest e-wallets in Indonesia, available at a wide range of stores and for online payments.
Its main features include utility bill payments (GoTagihan), spending management (“GoPay Diary”), bill-splitting, and a postpaid option (PayLater).

OVO

Established in 2017 by the Lippo Group, OVO is an e-money service that has expanded its usage area through partnerships with Grab and Tokopedia. In addition to payments using e-money balances, OVO also offers financial services such as loans, investments, and insurance.
By integrating with Grab’s ride services and Tokopedia’s e-commerce payments, it has secured a wide user base.

DANA

DANA is an e-wallet launched in 2018 with investments from Emtek (an Indonesian media company) and China’s Ant Financial (a subsidiary of Alibaba).
It emphasizes security with a policy of “Safe, Friendly, Easy Access,” offering full compensation for all transactions. DANA provides a variety of functions including mobile credit top-ups, bill payments, and e-commerce transactions.

ShopeePay

ShopeePay is the e-wallet of major e-commerce platform Shopee, which started full-scale operations around 2018.
It is supported for its convenience in online Shopee payments, free bank transfer services, QR code payments, and a postpaid feature (SPayLater). Especially during Shopee sales events, users who pay with ShopeePay receive special discounts, making it a popular choice. Thanks to aggressive cashback and promotion strategies, it grew rapidly and even briefly held the largest market share based on transaction volume.

LinkAja

Launched in 2019 as a state-owned enterprise initiative (including Telkomsel), LinkAja merged earlier services like T-Cash. Using telecom infrastructure, it provides basic functions such as transfers, payments, and top-ups.
Although its market share is lower than private e-wallets, its strength lies in its integration with public services (utility payments, government subsidies, etc.).

Cashless Payments Market Share Trends

In Indonesia, the market is dominated by four players—GoPay, OVO, DANA, and ShopeePay—used by a large number of consumers. Users often switch between wallets depending on the use case, and few rely on a single one.
For example, Grab users tend to prefer OVO, Gojek users prefer GoPay, and Shopee users often use ShopeePay. Many users also change apps depending on the availability of cashback or discount campaigns.

According to surveys, over 70% of people actively use e-wallets, surpassing cash and bank transfers in popularity. Many users use multiple services, and it is said that over 60% of them use both GoPay and OVO.
Each company is striving to expand its user base through promotions and new feature rollouts. For instance, OVO has exceeded 115 million app downloads, and during the pandemic period, its usage increased by 267% compared to the previous year.

 

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Penetration Rate of Cashless Payments in Indonesia

The rate of adoption of cashless payments across Indonesia has significantly improved in recent years. As of 2022, the financial inclusion rate—referring to people who own a bank or e-money account—reached 76.19%. Especially in urban areas, cashless payments have become a part of daily life.

According to a consumer survey by Visa, 93% of respondents have used mobile wallets or QR code payments. In major cities like Jakarta and Surabaya, a “cashless lifestyle” is becoming a reality, particularly among the younger generation.

Urban-Rural Disparity on Cashless Payments

In urban areas, high-speed communication networks and merchant infrastructures are well developed, leading to the widespread use of cashless payments. In large cities such as the Jakarta metropolitan area, Surabaya, and Denpasar in Bali, many stores accept electronic payments, and cashless payment is also common in taxis and public transportation.

Conversely, in rural and remote island areas, the lack of internet access and low smartphone ownership have made cash transactions still the norm. The government is promoting the nationwide QR code standard “QRIS” to expand cashless payments to street vendors and small shops. However, in areas with unstable signals and among the elderly, adoption is slow, and access to digital financial services remains insufficient.

In particular, in rural areas, lack of literacy in digital devices and financial services is a major issue, and many still do not use cashless systems. The gap between urban and rural usage remains large, and further awareness efforts by the government and private sector are needed.

Usage of Cashless Payments by Age and Income Groups

Younger and higher-income groups tend to use cashless payments more frequently. According to Visa’s Consumer Payment Attitudes 2022 survey, 78% of Gen Z (18–24 years old) and 74% of Millennials (25–40 years old) have already tried cashless payments. Among the wealthy, 73% have transitioned from cash to cashless payments.

On the other hand, middle-aged and older individuals, as well as low-income groups, still rely heavily on cash, with a certain number having never tried cashless payments. However, since the COVID-19 pandemic, resistance to digital payments has declined across all generations.

According to the survey, 67% of Indonesians responded that they are “ready to live without cash”, and more elderly individuals are trying out smartphone payments. Still, 63% of respondents reported they prefer paying with cash, suggesting that generational gaps remain a key challenge in achieving full cashless adoption.

Going forward, as the government and financial institutions work to improve digital financial literacy, cashless payment adoption is expected to expand across broader demographics.

Convenience of Cashless Payments in Indonesia

The rapid spread of cashless payments in Indonesia has been largely driven by their convenience and benefits. However, there are also operational downsides and risks. Here, we summarize the advantages and challenges of cashless payments based on feedback from consumers and experts.

Advantages of Cashless Payments

Convenience and Speed

With just a smartphone, users can shop or make payments without carrying a wallet, significantly reducing both the effort and time required for transactions. Unlike cash, no change is needed, and payments can be made down to the last rupiah. Especially for the younger generation, who prefer to carry fewer items or use smaller bags, contactless payments match their lifestyle well.

Improved Safety

By not carrying large amounts of cash, the risk of pickpocketing or robbery is reduced. There’s no concern over counterfeit bills, and each transaction includes records and authentication (PIN/OTP), making it easier to track fraud if it occurs. During the COVID-19 pandemic, the hygiene benefits of contactless payments also gained attention, with more people viewing it as cleaner and safer than cash.

Ease of Budget Management

Digital payments automatically record spending history, allowing users to check how much they spent and on what via smartphone apps. Many users report that this helps them reduce wasteful spending and manage their finances more effectively. One young user noted, “With cash, I tend to spend freely, but with cashless, I’m more cautious,” showing that digital tools can support financial discipline.

Abundant Rewards and Discounts

Electronic wallet providers frequently offer cashback and discount campaigns to attract customers. For example, ShopeePay has launched bold promotions like the “IDR 1 Campaign,” free shipping, and up to 110% cashback. GoPay and OVO also distribute 5–50% discount coupons at partner stores. These exclusive benefits drive further adoption of cashless systems.

Additional Services Beyond Payments

Digital payment apps offer a wide range of services including microloans, investment products, and insurance applications. They also enable one-stop payments for mobile phone bills and utilities, enhancing their role as financial platforms. These services, which are hard to achieve with cash, improve the overall user experience.

Disadvantages of Cashless Payments

Risks During System Failures

A complete reliance on cashless payments carries the risk of being unable to pay during communication outages or system crashes. There have been reports of long lines in stores due to specific e-money system failures and users unable to pay for transport after their phone battery died. While cash can still be used in emergencies, digital systems are vulnerable to infrastructure issues, highlighting their fragility in critical times.

Security Risks

Digital payments can be targets for cyberattacks and fraud. Risks such as unauthorized access leading to balance theft, skimming, phishing scams, and more are unique to digital platforms. Users who fail to stay vigilant may have their accounts compromised without knowing. Concerns over personal data leaks are also ever-present, and both service providers and users must bear the cost of security measures.

Usage Disparity and Digital Inequality

Those without smartphones or bank accounts are unable to use cashless services, raising concerns about leaving such people behind. Many elderly users struggle with digital tools or are resistant to them, and accidental transfer errors are also common. As the shift to a cashless society continues, addressing this “digital divide” becomes more important. The government is working on financial education and easier-to-use interfaces, but it will take time to ensure everyone can benefit.

Transaction Fees

Various fees come with digital payments. These include top-up fees, interbank transfer charges, and merchant discount rates (MDR), which do not occur with cash payments. For example, users may be charged several thousand rupiah when topping up e-money from an ATM, and since 2023, QRIS payments carry a 0.3% fee even for small vendors. While these fees may seem small, they add up and become a cost disadvantage compared to “free” cash transactions.

Inconvenience for Cash-Only Users

Some stores and services now only accept cashless payments. In urban cafés and retail stores, signs saying “Cashless Only” are becoming common, inconveniencing customers who only have cash.

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Acceptance of Cashless Payments by Stores and Consumers in Indonesia

With the spread of cashless payments, both businesses and consumers are experiencing significant changes in their acceptance of this shift. Cashless payment systems have been implemented across various sectors such as retail, food services, and transportation, and while consumer satisfaction is generally high, some challenges have also been pointed out.

Business Side: Implementation and Challenges of Cashless Payments

Acceleration of Cashless Adoption through QRIS Implementation

In 2019, the Indonesian government and Bank Indonesia introduced the unified QR code standard “QRIS” (Quick Response Code Indonesian Standard). With this system, from small street vendors to large chain stores, businesses could accept various electronic wallet payments simply by displaying one QR code. As of 2024, approximately 32.7 million businesses across Indonesia have adopted QRIS, extending cashless payments even to street vendors and small businesses. In urban areas, it is now common to see convenience stores, shopping malls, and traditional market vendors using smartphones to display QR codes for payments. Public transportation has also adopted cashless payments, with electronic money cards now usable on buses and trains in the Jakarta metropolitan area, and app-based payments being prevalent in taxis and ride-hailing services.

Challenges for Businesses

Despite the progress of cashless payments, businesses face the following challenges:

1. Transaction Fees (MDR) Burden
   With QRIS payments, transaction fees were initially waived under government guidance, but from July 2023, a partial fee burden was introduced. Currently, a fee of 0.7% is imposed, with even small businesses paying 0.3%. Though lower than credit card transaction fees (2-3%), for small businesses with low-profit margins, this can be a significant burden, especially in high-volume, low-margin businesses where “cashless payments might actually pressure profits.”
2. Cost and Operational Issues of Implementation
   While QR code payments can be set up with minimal cost (just printing a sheet with a QR code), managing electronic sales records and employee training is necessary. Older business owners may struggle with this, with some avoiding electronic payments altogether due to discomfort with technology.
3. Fear of Tax Scrutiny
   Since cashless payments electronically record transactions, there is greater transparency in tax reporting. Some small business owners, particularly in family-run food establishments, resist cashless payment systems because it makes it harder to conceal their earnings.

Consumer Acceptance and Satisfaction of Cashless Payments

Consumer Evaluation of Cashless Payments

Overall, consumer satisfaction is high, with many appreciating the convenience of cashless payments. Research shows that users of electronic wallets often find them “secure and reliable” and “easy to use,” and the improvement in service reliability is key to the growing adoption of these systems. The following are common reasons why consumers prefer electronic payments:

• Fast and Easy Payments
  Without needing to handle cash, users can pay with just their smartphones, reducing wait times at checkout.
• Convenient Budget Management
  Transaction histories are recorded in apps, making it easier to manage expenses and prevent overspending.
• Attractive Promotions
  Cashback and discount campaigns are common, offering benefits that cash payments cannot.

According to Visa, cash usage, which was at 84% in the past, has been steadily decreasing, with electronic payments growing in popularity.

Consumer Complaints

On the other hand, there are also complaints from consumers, including:

1. Trouble during System Failures
   If the electronic payment system fails, customers may be unable to complete transactions. There have been instances where specific electronic wallets have had technical issues, temporarily disabling payments.
2. Remaining Cash-Only Situations
   Some stores and local markets still only accept cash, meaning customers need to carry both cash and digital payment options.
3. Concerns About Overspending
   The ease of spending without physically handling cash can lead to concerns about overspending, as users are not directly aware of the money being spent.

 

Future Outlook for Cashless Payments

Indonesia’s cashless payment infrastructure is rapidly developing due to government policies and corporate initiatives. Key factors for further expansion include:

• Reduction of Transaction Fees
  Lowering the burden on small businesses will encourage more stores to adopt cashless payment systems.
• Improvement of Digital Literacy
  Strengthening education programs and support for older business owners and those in rural areas will help them smoothly transition to cashless payments.
• Enhancing System Stability
  Strengthening backup measures in case of system failures will improve the reliability of payment systems.

As cashless payments continue to expand, the trend is expected to spread beyond urban areas to smaller businesses in rural regions, further advancing cashless adoption throughout Indonesia.

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Employee Misconduct in the Transition to Cashless Payments

The shift from cash-based operations to cashless payment systems has also influenced misconduct by store employees. While issues of employees embezzling cash or manipulating sales data were previously common, the adoption of cashless payments has changed both the methods and frequency of such behavior.

Typical Forms of Misconduct with Cash Transactions

Before the widespread use of cashless payments, various forms of misconduct occurred in cash transactions:

• Pocketing from the Register
  Staff members would fail to record a sale in the cash register and pocket the received money. This was particularly common in small stores or street vendors where sales management was less strict.

• Manipulating Change
  Employees would keep the difference when giving incorrect change to customers. This was more common in stores where small amounts of change were frequently exchanged, making discrepancies harder to notice.

These types of misconduct were possible because cash transactions often lacked clear sales records. With cashless payments, however, every transaction is electronically recorded, and store owners can track sales in real-time, reducing such fraudulent activities. Many business owners who adopted POS systems and electronic payments reported that “cash register discrepancies have decreased and employee misconduct has reduced.”

New Forms of Misconduct in the Cashless Era

With the adoption of cashless payments, new forms of misconduct have emerged. A recent case in Jakarta highlighted an employee at an ice cream shop who secretly replaced the store’s official QR code with their personal QR code and funneled customer payments into their own electronic wallet. This case involved embezzling around 50 million IDR (approximately 45,000 JPY) over three months, and it was uncovered after the owner noticed a drop in sales and conducted an investigation.

Other fraudulent activities include:

• Double Billing or Refund Fraud
  Fraudulent manipulation of payment terminals to charge customers twice or issue unauthorized refunds, diverting the money to the employee’s wallet.

These new forms of digital fraud present unique challenges for businesses, requiring new risk management strategies.

Corporate Measures to Combat Fraud

To address these fraudulent activities, businesses have been implementing various countermeasures:

• Integration of POS Systems and Electronic Payments
  By automating the recording of sales, businesses ensure that staff cannot alter transaction data.

• Stronger QR Code Management
  Official QR codes are displayed on fixed screens, preventing employees from using unauthorized codes. In some stores, QR codes are integrated into the POS system, reducing the risk of customers scanning the wrong code.

• Use of Security Cameras
  Security cameras are used to monitor suspicious behavior, particularly around cash registers, to prevent fraud like QR code replacement.

• Strict Penalties for Misconduct
  If fraud is discovered, businesses are increasingly reporting incidents to the police and prosecuting employees for embezzlement. The government and authorities, including OJK and the police, are also strengthening monitoring of digital financial crimes, with stricter punishments helping deter fraud.

• Employee Education and Awareness
  Companies are strengthening internal rules and training to ensure employees understand the high transparency of cashless payments and the risk of getting caught for fraudulent activities. It is essential to train staff on proper use of QR code payments and how to handle cases of fraud.

 

Future Outlook on Cashless Payments

With the growth of cashless payments, traditional cash-based fraud has decreased, but new forms of fraud, such as QR code abuse and refund fraud, are becoming increasingly problematic. Going forward, businesses will need to enhance their technical safeguards and focus on thorough employee training to prevent misconduct. Additionally, the government and industry organizations are expected to promote the verification of QR code authenticity through official apps and enforce strict penalties for fraud, strengthening the monitoring system to ensure the healthy development of a cashless society.

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Challenges and Future Prospects of Cashless Payments in Indonesia

Cashless payments in Indonesia have made remarkable progress, but there are still challenges to overcome, and the future prospects are being discussed. The government’s policies and central bank’s moves, along with points for expanding adoption, are outlined below.

Government Measures and Cashless Payments Promotion Policies

National Non-Cash Movement (GNNT) and Infrastructure Development for Cashless Transactions

Since 2014, the government has promoted the “Gerakan Nasional Non-Tunai (National Non-Cash Movement, GNNT),” pushing for the digitization of administrative services and public payments.
Bank Indonesia (BI), the central bank, has also formulated the “Indonesia Payment System 2030 Blueprint,” working on the development of next-generation cashless infrastructure, including the implementation of open banking using APIs and preparations for Central Bank Digital Currency (CBDC).

Specific Cashless Payments Promotion Measures

• Digitalization of local government payments

• Distribution of social security benefits through e-money (e.g., support funds for workers via electronic wallets)

• Implementation of toll road ETC systems and QR code payment for bus fares

• Introduction of unified QR code standard “QRIS” (2019)

The implementation of QRIS allows a single QR code to accommodate all electronic money, significantly improving convenience for both users and merchants. Additionally, cashless adoption in small shops and street vendors is being supported through fee discounts and promotional campaigns.

Cross-Border Payments Promotion

The Indonesian government has been advancing cross-border payment integration, such as linking QR codes with neighboring countries (Thailand, Malaysia, Singapore), enabling travelers to make payments with their home country’s e-money within the ASEAN region. This is expected to improve the convenience of cashless payments not only in Indonesia but throughout Southeast Asia.

Challenges of Cashless Payments

Delayed Infrastructure Development

Further adoption of cashless payments requires improvement in communication infrastructure. Over 30% of the population lives in areas without internet access, and in regions with unstable power or signals, introducing electronic payments remains a challenge. To enable stable cashless transactions in remote or island areas, the strengthening of mobile networks and digital financial services infrastructure is essential.

Improving Digital Financial Literacy

According to the Financial Services Authority (OJK), Indonesia’s financial literacy index stood at 38% in 2022, which is relatively low, meaning only a limited group can properly utilize cashless payments. To expand the use of electronic payments and prevent fraud, enhancing financial education is necessary. Specifically, digital financial education for the elderly and low-income groups is crucial.

Interoperability Between Payment Platforms

While QRIS has unified basic payments, challenges remain in the interoperability of different e-wallets, such as points programs and app-to-app money transfers. Further integration is needed so that users do not need to use multiple wallets simultaneously.

Strengthening Cybersecurity

As cashless payments increase, the risk of cyberattacks also rises. The government established the National Cyber and Encryption Agency (BSSN) in 2021 to strengthen cybersecurity in the financial sector. However, cooperation with private businesses is also essential. Measures for detecting fraudulent transactions, hacking prevention, and phishing fraud will need to be further enhanced.

Future Growth Projections and Technological Innovations of Cashless Payments

Expected Growth of the E-money Market

Indonesia’s cashless payment market is expected to grow significantly in the coming years. According to central bank projections, the transaction volume of e-money payments is expected to increase by 23.9% from IDR 399 trillion in 2022 to IDR 495 trillion in 2023. It is also predicted that the growth rate will continue at around 15% annually until 2025.

Vision for Digital Payments in 2030

The government has set a vision for the future of the digital economy, aiming to “expand the digital payment volume 2.5 times its current size by 2030 (reaching around IDR 12,300 trillion or USD 760 billion).” If realized, Indonesia is likely to become one of the most developed cashless economies in the ASEAN region.

Technological Innovations and New Payment Methods

Several technological innovations are expected to support the further growth of cashless payments in Indonesia:

• Introduction of Central Bank Digital Currency (CBDC)
  Bank Indonesia is conducting a pilot for wholesale CBDC (digital rupiah) and plans to introduce digital currency for retail payments in the future. This is expected to further streamline and stabilize domestic payments.
• Introduction of Biometric Payment Systems
  Systems utilizing fingerprint or facial recognition for payments are being developed, with banks and e-wallet companies actively involved.
• Expansion of Offline E-money Use
  Considerations are underway to introduce IC card-type e-money and offline payment systems using Bluetooth/NFC for areas without signal coverage.
• AI-based Fraud Detection
  AI technology is being developed to detect abnormal transaction patterns and prevent fraudulent transactions in advance.

 

 

Summary

Indonesia’s cashless payment market is rapidly growing, centered around platforms like GoPay, OVO, DANA, and ShopeePay, contributing to enhanced consumer convenience. In urban areas, cashless payments have become a daily norm, and with government support, efforts to expand usage in rural areas and small businesses are also underway.

However, challenges remain, including underdeveloped infrastructure, disparities in digital literacy, cybersecurity risks, and the burden of payment fees. Special attention is needed regarding changes in fraudulent activities by staff and new forms of fraud in a cashless society.

Looking ahead, the Indonesian government aims to promote QRIS adoption, strengthen digital financial education, enhance interoperability of cashless payments, and improve cybersecurity to realize a safer and more convenient cashless society. There is a strong possibility of achieving a “cashless society” by 2030, and attention is focused on future developments.

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Glossary of terms used in this article:

• Cashless payment: Payments made without using cash, utilizing electronic money, credit cards, QR codes, etc.
• E-Wallet: An electronic money service that can be used on smartphones, such as GoPay, OVO, DANA, and ShopeePay.
• QRIS (Quick Response Code Indonesian Standard): A unified QR code payment system introduced by Bank Indonesia that supports all electronic money services.
• PayLater (Post-payment service): A feature integrated into cashless payment apps that allows users to pay in installments or defer payments.
• Financial literacy: The knowledge and understanding of managing money and utilizing financial services. Low literacy increases the risk of falling victim to fraud.
• Cybersecurity: Measures and technologies to ensure the security of cashless payments and online transactions, including preventing unauthorized access and phishing.
• Cross-border payments: A system that allows payments to be made using different countries’ payment systems. For example, Indonesia’s QRIS enables payments in Thailand and Malaysia as well.

 

 

FAQ (Frequently Asked Questions)

Q1. What are the most popular cashless payment apps in Indonesia?

A. GoPay, OVO, DANA, and ShopeePay are particularly popular and dominate the market share. Users choose between them based on their needs and the benefits offered.

Q2. What is the penetration rate of cashless payments in Indonesia?

A. According to data from 2022, the financial inclusion rate (the percentage of people with a bank account or e-wallet) is 76.19%, and approximately 93% of people have used an e-wallet.

Q3. What are the advantages and disadvantages of cashless payments?
Advantages:

• Payments can be made using just a smartphone

• Fast and easy

• Easier to manage household finances

• Frequent cashback and discounts

• Reduces the risk of theft or pickpocketing

Disadvantages:

• Payments cannot be made during system failures

• Risks of cyberattacks and fraud

• Difficult for the elderly or those unfamiliar with digital tools to use

• Some services charge transaction fees

Q4. Is cashless payment in Indonesia safe?

A. It is generally safe, but there are risks such as phishing scams, unauthorized access, and QR code tampering. Using official apps and setting up two-factor authentication can enhance security.

Q5. How can I use cashless payments?

A. You can download an e-wallet app on your smartphone, load money via a bank account or e-money, and start using it. For QR code payments, simply scan the code at participating stores to complete the payment.

Q6. Can cashless payments be used in rural areas of Indonesia?

A. While urban areas have seen widespread adoption, rural areas and islands still rely heavily on cash due to limited internet access and smartphone penetration. The government is promoting adoption through QRIS (Quick Response Code Indonesian Standard).

Q7. What does the future of cashless payments in Indonesia look like?

A. The Indonesian government aims to increase the digital payment volume by 2.5 times by 2030. The government is pushing for more digital financial education, biometric payment systems, and enhanced cybersecurity to create a more convenient cashless society in the future.

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