Indonesia Payments

OVO’s CEO Provides an Insiders’ Look into Indonesia’s Thriving Fintech Scene

Indonesia is considered the crown jewel for many fintechs looking to expand to the ASEAN market. Over the past 15 years, Indonesia has made remarkable progress in reducing poverty which is now below 10%, according to the World Bank. During this period, the country has also witnessed its middle class grow from 7% to 20% of the population, with 52 million Indonesians currently belonging to this group.

Despite headwinds triggered by the COVID-19 pandemic, Indonesia’s internet economy reached US$44 billion in 2020, up 11% from the previous year. It’s projected to grow 23% over the next five years to reach US$123 billion in 2025, and become Southeast Asia’s largest Internet economy, according to the e-Conomy SEA 2020 Report by Google, Temasek and Bain & Company.

Speaking to Jason Thompson, CEO of OVO, a leading Indonesian digital payments player, he described Indonesia to be an exciting place to be in. He said, “we’ve seen the market move very rapidly … the middle class economy, the affluent consumers: we see them as a real vehicle of change.”

Engaged Indonesian regulators enable companies like OVO to innovate

Thompson, who has more than 15 years of experience in leadership roles in companies such as Microsoft and Grab Finance, said the most distinctive characteristic of the Indonesia fintech industry was its proximity with the government and regulators.

Jason Thompson, CEO of OVO

“If you take for example the investment product we’ve recently launched … we worked really close with the regulators and actively took feedbacks and guidance, discussing things like data protection, security, fraud management,” he explained. “The regulators did a lot of work with us to learn, and then created a sandbox.

“Western European and North American regulators can learn an awful lot from Indonesia and the way that we work in one team to solve problems.”

He also compared the speed at which things scale in Indonesia compared to mature markets which take up to 3 years to hit velocity, in contrast, he described the adoption by Indonesian consumers as incredible.

Focus on solving core problems instead of creating the perfect product

“A product that is good enough, is literally good enough.”

Thompson explained that you don’t have to create the perfect product, what’s important is that you solve the core problem for the customer. He added that Indonesian customers are very forgiving, and they will engage with you, give you feedback and help you develop the product, but he stresses not to abuse the goodwill and to always respect customers.

He described the work that OVO does as pioneering work, and he accepts failure as part of the job but the fact that Indonesian customers are communicative and forgiving has allowed them to iterate new products.

Is OVO transitioning into a super-app?

Inspired by bigtechs from China, many of South East Asia, fintech firms are looking to transform themselves into a superapp. This is especially the case with payments company who sometimes struggle with razer-thin margins.

With OVO launching insurance and investment products, we asked Thomspon if that is the direction that OVO is headed towards, he responded,

“OVO has no interest in becoming a so-called “super app” but instead will continue building on top of its payments business’ good quality verticals that serve financial inclusion,”

“I think it’s very hard for a financial services application to become a super-app and it’s certainly not in our agenda,” Thompson said. “The governance in a financial services business is very high … We are really developing as a financial services organization. Culturally, it’s important we focus on that and achieve that level of governance. The way we protect our customers, their money, their information, etc. is super important.”

Thompson instead believes that OVO will benefit from deepening the focus on their existing product lines have rolled out. He is also currently keeping a close eye on the digital banking scene in Indonesia and trying to determine OVO’s role in it and identify potential partners that they can work with.

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