Financial Inclusion

New Indonesia Credit Card Designed To Help Underbanked

credit cards

Indonesia-based Traveloka has partnered with Bank BRI on a credit card for Indonesia’s underbanked.

The travel and lifestyle platform has received investments from the likes of JD.com, Sequoia Capital and Hillhouse Capital, according to Deal Street Asia. Speaking at a conference in Singapore, Traveloka Group of Operations President Henry Hendrawan said the company is working to solve the “pain points” of Indonesians — most notably that many citizens are underbanked.

Cash on delivery was the payment method used for nearly two-thirds (65.3 percent) of digital purchases in Indonesia in February 2017, while credit cards were used to complete approximately one-fifth (20.7 percent) of online purchases.

“Currently many Indonesian consumers are forced to book their flights and hotels last minute due to the lack of credit access typically provided via credit cards,” Hendrawan said. “Many of these users end up paying higher last-minute prices or sometimes are unable to find the airline seat or hotel rooms they want.”

Traveloka created the PayLater card with Bank BRI with the goal of bringing some of Indonesia’s underbanked online by offering exclusive deals across travel, lifestyle and insurance products. Both online and offline transactions will be supported under Visa’s global network, and may also be managed through Traveloka’s mobile app.

There are plans to issue 5 million PayLater cards by 2025.

As Hendrawan explained, Indonesia remains highly underbanked as a country, with only 17 million of its 270 million people having access to credit cards. And while determining a consumer’s creditworthiness has been difficult for traditional banks because of the lack of credit and personal data, Traveloka said it will be able to fix this issue via consumer data it has accumulated over the years as customers book hotel, flight and events on its platform.

Hendrawan explained that Traveloka’s users are less likely to fake their personal information because they rely on the platform for travel planning and transaction purposes.

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