Speaking of the uprising trend of local startups, payment gateways have a vital role in their every single seamless transaction. Payment gateways allow online merchants to accept various payment options through the site, credit/debit card or bank transfers. Multinational payment gateways don’t provide localised payments, e.g. bank transfers so to get full coverage you’ll need to work with a local payment gateway.
Unlike other countries with a mature startup ecosystem, Indonesia’s credit card penetration is less than five percent (5%), not to mention forty percent (40%) of the population does not have a bank account. It is a challenge but also an opportunity for local payment gateways. Therefore, the ecosystem of payment gateways in Indonesia is increasing with more than 20 players. Here are some of the top names in the industry.
DOKU, operated by PT Nusa Satu Inti Artha, is the pioneer of online payment gateways in Indonesia. It was founded in 2007 and previously known as NSIAPay.
For business players, DOKU has a wide range of products such as Payment Link, E-Invoice, Web, and Applications. Merchants can receive payments via e-mail by E-Invoice, or over social media, messaging applications, or forum by Payment Link. In terms of platform, payments can be done on a browser for Web users, or over iOS and SDK Android for DOKU Application users.
The payment methods provided by DOKU are credit cards, debit cards, internet banking, bank transfer, and an e-wallet named DOKU Wallet. This DOKU’s own wallet is running licensed e-money. Since November 2013, DOKU Wallet users are able to send money over their Facebook account to other accounts in their friend list from Rp 1 to Rp 1 million. In addition to that, DOKU accepts offline payment from some mini markets from Alfamart’s group such as Alfamart, Alfamidi, and Alfa Express. Recently, DOKU’s e-money services are acquired by Indonesian media conglomerate Emtek. DOKU is a PCI DSS Level 1 compliant payment gateway.
Some of DOKU’s notable clients are Century (pharmacy), Joox (music player app), Air Asia (airline), and AlfaCart (e-commerce)
Previously known as Veritrans Indonesia, Midtrans was founded in 2012. It is a joint venture between Japan’s payment gateway Veritrans Inc., Japan’s e-commerce company Netprice.com, and Midplaza Holdings. Even though Midtrans is selling Risk Management and Chat Commerce features, the payment gateway is still Midtrans’ backbone.
Just like DOKU, Midtrans offers several payment options such as card payments, direct debit, and bank transfer. Direct debit is provided by collaborating with Indonesia’s major banks such as Mandiri, CIMB, BRI, and BCA. When it comes to e-wallets, Midtrans accepts online payment not only from Mandiri e-cash but also telco companies such as t-cash by Telkomsel, XL Tunai by XL, and Dompetku by Indosat. Midtrans partners enable over the counter payment and through Indomart and Kioson outlets. Overall, Midtrans provides 18 payment methods which are integrated into a page called Snap.
Tokopedia (e-commerce), Garuda Indonesia (airline) and Cinemaxx (cinema) are some of Midtrans’ existing clients.
Compared to the payment gateways above, Xendit is relatively new for Indonesia’s fintech ecosystem. It was founded in July 2015 after winning a Berkeley vs Stanford hackathon . In less than two years, Xendit has successfully expanded the portfolio of their fintech product to a payment gateway. It simplifies payments by managing invoices, sending instant notifications when paid, and rapid, single integration that connects you to all the payment methods.
There are three products offered by Xendit for merchants: XenPayments, XenInvoice, and XenDisburse. XenPayments is Xendit’s payment gateway which allows merchants to accept payments from a credit card, bank transfer, or even virtual account. This product is commonly used for e-commerce checkout, game credit top-up, loan repayment, and subscription payment. Thanks to XenPayment’s live URLs, Xendit also provides a checkout UI for free for faster go live.Merchants simply need to send a live URL to their customers and they will get paid anywhere and anytime.
When it comes to fraud detection and security, all payments at Xendit are protected by the same world-class fraud detection system as Visa. The system is based on global live data and billions of data points matched with machine learning algorithms that are continuously improving Xendit’s accuracy. On top of that, all sensitive data is encrypted in transit and at rest, and all payments are processed on PCI DSS compliant system to protect the business with security standards used by Sillicon Valley.
At the entry level, Xendit offers 30 days for free service with fully fledged features, full support, and seamless transition to upgrade merchant’s account. For merchants with more than Rp 500 million transactions per month, Xendit offers discounted rates with software for traditional business, not to mention the seamless custom integration. Merchants are also able to choose Pay As You Go. For each payment done via bank transfer, the merchant needs to pay Rp 4.900 only. Xendit charges to credit card payment 3.1% + Rp 2.500 per successful payment received including the bank fees. For this option, the merchant will not find any monthly setup, maintenance, or any hidden fees.
Each company has its own strengths and weaknesses. Talk to each one and you will find reasons to work with them for different use cases and depending on your priorities. Should you have more questions in regards to payments in Indonesia, please feel free to ping us at Xendit over online chat, WhatsApp, or email.