Go-Jek, the Indonesia ride-hailing service that reached billion-dollar startup status, is branching into the mobile payment market, enabling customers to pay for rides with digital payment methods instead of cash.
According to a report by Bloomberg, Go-Jek, which has the backing of Sequoia Capital, KKR & Co. and Warburg Pincus, rolled out the service, dubbed Go-Pay, in April, and now, it accounts for more than half of the startup’s transactions. “We’ve never seen a market adoption like Go-Pay,” said Nadiem Makarim, a former McKinsey & Co. consultant who cofounded Go-Jek in Jakarta in 2010, in an interview with Bloomberg.
According to the report, Makarim views digital payments as a differentiator among the other ride-hailing apps in the country and said it could morph into a lucrative business for the startup. The startup integrated Go-Pay into the Go-Jek app, enabling customers to store money on their mobile phones similar to a digital debit card. Adding to the Go-Pay account can be done from a bank account or ATM. If customers don’t have a bank account, they can hand cash over to Go-Jek’s drivers, and it will be transferred immediately to their account. Go-Pay can be used for all of Go-Jek’s services, including rides and grocery deliveries. The company plans to open Go-Pay up to merchants sometime in 2017.
“In Indonesia, people are already using the Go-Jek app, and it’s convenient to have an eWallet, so it won’t be difficult to convert them,” said Fransisca Widjaja, an analyst at Macquarie Capital Securities, in the same Bloomberg report.
With Go-Jek facing a lot of demand for its services, Makarim told Bloomberg it plans to double the number of engineers it has in India to greater than 200, and he plans to continue to make acquisitions of startups to access talent. The company has already absorbed the talent of four startups it acquired in India in 2016.