A pair of Indonesia’s FinTechs plan to merge in a bid to challenge Gojek’s GoPay, sources told Bloomberg.
The potential union would unite Ovo, Indonesia’s giant digital payment service that is backed by Singapore’s ride-hailing giant Grab Holdings, along with Dana, Indonesia’s digital wallet platform, an Alibaba Group Holding Ltd. affiliate.
If successful, it could catapult Ovo and Dana into dominating Indonesia’s multibillion-dollar online payments market. Ovo and Gojek have been battling for top payments spot for the last two years, the report said.
In addition, it intensifies competition among investors in Indonesia’s digital payments industry with its 260 million people.
Gojek’s app has been downloaded 170 million times and was the most widely used on-demand app in Indonesia in 2019, according to App Annie. Ovo is on 115 million devices. Ovo and Dana see digital payments as a key way to add customers and offer them a number of financial products to make the companies profitable, Bloomberg reported.
Representatives for Grab, Ovo and Dana declined to comment.
Last week, a PYMNTS report titled “Digital Payments in a Digital World,” showed how electronic banking has become the new constant. Consumers use multiple digital devices to check balances, buy products and services or pay bills. They expect digital payments to work seamlessly.
The COVID-19 pandemic has put digital banking in the forefront as many bank branches have closed.
In April, PYMNTS reported Gojek purchased the point-of-sale (POS) and payments aggregator Moka for $130 million. That deal put Gojek as a major player in Indonesia’s digital payments space.
Moka itself is taking off. The company provides point-of-sale and payments services in 35,000 restaurants, cafes and shops in more than 100 Indonesian cities. With Moka’s app, retailers can accept debit and credit cards or mobile wallets including WeChat Pay and GoPay. The app can be used as well to track sales, manage inventory and run loyalty programs.