Facebook, three fintech firms in talks to launch mobile payments service in Indonesia
- If approved by country’s financial regulator, it would be among the first such service under the social media giant’s Facebook Pay application
- Indonesia is one of the largest markets globally for Facebook and WhatsApp, with more than 100 million users
Facebook is working with three Indonesian digital fintech firms to apply for regulatory approval to launch mobile payments service in the country, an official at the financial regulator said.
The plan, if approved, could be among the first such service under the social media giant’s unified payment service that was unveiled in November. Facebook Pay allows users across the company’s various platforms, including WhatsApp and Instagram, to make payments without exiting the app. Bank Indonesia assistant governor Filianingsih Hendarta, who heads payment system policy, told Reuters that three local firms had approached the regulator to ask about tentative approval for a payments partnership with Facebook.
“So far no one submitted the formal application. Some of them just came to discuss during the consultative meeting with BI (Bank Indonesia),” Hendarta said.
She said the three e-wallet operators are Indonesian ride-hailing firm Gojek’s GoPay, state-backed LinkAja and fintech start-up OVO, which is owned by Indonesian conglomerate Lippo Group and backed by Singapore-based riding-hailing firm Grab.
Facebook wants to capitalise on the Indonesian market and is preparing for regulatory approval in the country, according to four sources with knowledge of the matter.
Reuters reported in August that Facebook’s WhatsApp had been in talks with those firms to launch digital payment services in Indonesia.
A spokeswoman for Facebook said the company was seeking to bring digital payments to more countries and believed “digital payments will ... open up extraordinary opportunities for businesses to grow”.
“We are in conversations with partners in Indonesia,” the spokeswoman said. “However, the discussions are ongoing and we do not have anything further to share at this stage.”
OVO and Gojek declined to comment. LinkAja was not immediately available for comment.
The world’s biggest social media company is also in separate talks to partner with Gojek, which counts Alphabet’s Google and Chinese e-commerce company JD.com among its backers, two sources said.
“The talks could lead either to a strategic partnership, a collaboration, or an investment,” one person with knowledge of the matter said. The talks, which predate the coronavirus outbreak, are at an early stage.
Elsewhere in Asia, Facebook has held talks to buy a multibillion-dollar stake in Indian conglomerate Reliance Industries’ telecommunications unit, media reports said.
Gojek declined to comment. Facebook referred Reuters to its general statement.
Having evolved from a ride-hailing service founded in 2010 to a one-stop app offering online payments, food ordering and even massage services, Gojek is valued at US$10 billion.