Promote financial inclusion with digital

Put ecommerce and financial services within reach of Indonesia’s micro-businesses and consumers


Digital disruption has the potential to create more inclusive societies in many ways, not least by affording traditionally marginalised or excluded groups access to tools, services, information and data. Increasingly, though, the benefits of digital transformation are becoming associated with the capacity to monetise and charge for products and services online while making and receiving payments digitally. 

Until recently, wider financial inclusion has been a stumbling block in south-east Asian countries where physical cash is still the predominant transactional medium, and the majority of individuals are unbanked or underbanked. In Indonesia, for example, where many rural communities are still served by warungs or roadside “mom and pop” stalls, rather than supermarkets or convenience stores, cash was used for 77 per cent of all point-of-sale purchases in 2021. 

In a bid to tap this large and underserved market, homegrown ecommerce companies and their financial services partners, including Singaporean-headquartered bank DBS, are racing to bring the majority of Indonesia’s consumers into the wider financial system while providing them with the kind of choice and convenience that most of us take for granted. 

“We realise that if we want to address and penetrate this market with our tech capabilities, the approach must be different to the ones used by ecommerce companies in other countries,” says Victor Lesmana, CEO, BukaFinancial and Commerce at Bukalapak, one of Indonesia’s leading tech companies. “We need to have an offline presence to engage the Indonesian traditional kiosks or warungs, where a high number of cash transactions happen daily in a lot of neighbourhoods.” 

In 2017, Bukalapak created Mitra Bukalapak, an online-to-offline platform that allows MSMEs with technical capacity to widen their product and service offerings to include selling virtual products such as pre-paid phone credits, electricity tokens and game vouchers, as well as providing services including money transfer, bill payments and goods delivery.

Mitra Bukalapak deploys a Virtual Account (VA) payment system, co-developed by DBS, that allows consumers to circumvent traditional banking methods, thanks to a network of warungs that consumers can use to deposit cash into a merchant’s VA. For the more than 15mn micro and small business owners using the Mitra Bukalapak platform, real-time payment and bank verification supported by DBS allow for cash-flow transparency and peace of mind.  

DBS’ technology also allows Bukalapak to broaden and embed the reach of its platform. “We are excited to learn that DBS’ tech-based product is the right fit for our approach in enabling Mitra Bukalapak's customers to pay for transactions,” explains Lesmana. “Not just in Bukalapak, but also other platforms, to any bank accounts, through Mitra Bukalapak.” 

By partnering with Bukalapak, DBS was also responding to wider trends in Asian financial services, explains Sriram Muthukrishnan, Group Head of Product Management, Global Transaction Services at DBS. “There is growing recognition and acceptance that digital tools and timely cash management are critical aspects of keeping companies financially robust and ahead of the competition,” he says. “This has given rise to a surge in demand for digital transformation solutions that help companies, big and small, to advance their cash and treasury management ambitions, helping them achieve greater working capital efficiency and cash-flow predictability.”

For Muthukrishnan, DBS’ partnership with Bukalapak is a prime case of the kind of collaboration that is essential for the industry. “Collaboration is key to driving innovation in the financial services sector,” he says. “We readily welcome engagement from the financial community to innovate, connect and collaborate in the creation of products that will solve pain-points and existing frictions while directly addressing the needs of our clients.”

For DBS, the ability to meet increasingly dynamic customer expectations and demands is not only predicated on delivering instant fulfilment, but on building secure ecosystems that the participants can trust. “There is no one-size-fits-all solution,” Sriram Muthukrishnan insists. “That’s why DBS designs products and solutions for various markets that are specifically tailored to businesses’ needs. Ultimately, we are client-driven as we keep their needs at the centre of all that we do.”

As Bukalapak’s CEO of BukaFinancial & Commerce recalls, the decision to embed DBS’ innovative virtual banking software on its app is not only logical from a business perspective, but ethically as well. “By equipping Mitra Bukalapak users with this capability, together with more than 40 other virtual products and services, we are enhancing their capabilities as warungs and putting them on a level playing field with modern retailers,” Lesmana explains. “At the same time, we are also empowering them as agents of financial inclusion in their neighbourhood by providing accessible financial and digital products to their customers.” 

This content has been produced by DBS Bank in collaboration with the Commercial Department of The Financial Times.