95 banks in Indonesia have now signed up to the National Payment Gateway system (GPN) launched around one year ago. The system is designed to integrate a common payment platform across all ASEAN countries, starting first by using a common platform in each member nation.
By last month, almost a million new debit cards using the GPN system had been issued to customers in Indonesia, and Bank Indonesia (BI) is pushing hard to ensure that merchants, banks, and customers are happy using the new payment network. BI has announced a major expansion plan with the production of more cards and more locations that will accept them.
But what does this mean for the existing card payment systems such as MasterCard and Visa? Can a local payment platform become more popular?
Naturally, if the entire ASEAN region is creating a local payment gateway, then there will be the possibility that payment volumes for Visa and Mastercard will decline, but I don’t believe there will be any catastrophic collapse in the use of traditional payment systems.
How can I be so sure? Because it is the customer that really decides on which payment platform they want to use. Customers choose services they are familiar with and also those that offer the best customer experience (CX). The new system may be well designed and may work well for banks and merchants, but it will take a lot to change the behavior of millions of customers.
In fact, to give just one example, Mastercard has been around since 1966 offering card payment services across the world. Mastercard has over 11,000 employees, supports over 150 currencies in 210 different countries and processes almost 50 billion transactions each year, so they clearly have a strong focus on the customer experience.
This is what will make the real difference – the experience that customers have when using the payment service. In this TP Talks webinar, Senior Vice President, Global Contact Center Management at Mastercard, described how they build their payment services with the customer experience at the heart of their strategy. Mastercard now has strong policies around which companies they will work with and partner companies or suppliers that do not have a strong focus on CX don’t get their business.
The GPN system may get some traction if customer and merchant costs are reduced, but most customers never see these costs anyway. They just want to use the payment system that works best for them. With Visa having experience in payments since the 1950s, Mastercard from the 1960s, and all the new digital payment systems becoming popular across Asia, it will be a challenge to take on the existing infrastructure. Any new payment platform has to offer much more than just a copy of what already exists today and it has to make life easier for the customer.
Let me know what you think about the GPN system in Indonesia by leaving a comment here or get in touch directly via my LinkedIn.