An official at the financial regulator said that Facebook Inc. or Facebook was in talks with three digital fintech firms to apply for regulatory approval in Indonesia to launch mobile payments in the country. The three e-wallet operators, which Facebook dealt with, were Indonesian ride-hailing firm Gojek’s GoPay, fintech startup OVO backed by Singapore-based riding hailing firm Grab, and state-backed payment firm LinkAja.
Facebook’s New Mobile Payment Service
The social media giant had introduced the payment service in November 2019, under the name called Facebook Pay, through which users across its various platforms including WhatsApp and Instagram to make payments without exiting the app.
Facebook has been gearing up to launch its first payment service in one of the busiest markets in Southeast Asia by making partnerships with digital firms especially Gojek. Sources stated that Facebook set to capitalize on the Indonesian market and was seeking for regulatory approval in the country.
Assistant governor of Bank Indonesia, Filianingsih Hendarta, who supervises Payment system policy, told Reuters that local firms had approached the regulator seeking a tentative approval for a payment partnership with Facebook. Nonetheless, Hendarta said, “So far no one submitted the formal application. Some of them just came to discuss during the consultative meeting with BI (Bank Indonesia).”
A spokeswoman for Facebook said the company has been focusing on digital payments as part of expanding its business to more countries. The spokeswoman added that Facebook believed that “digital payments will… open up extraordinary opportunities for businesses to grow… We are in conversations with partners in Indonesia, however, the discussions are ongoing and we do not have anything further to share at this stage.”
Facebook Targeted Indonesia
Over the years, Facebook has been targeting to accelerate its business expansion in Indonesia, home to 260 million people and the largest economy in Southeast Asia, which has over 100 million users combining Facebook and WhatsApp. According to media reports, the social media platform has recently held talks to buy a multi-billion dollar stake in the Indian conglomerate group, Reliance Industries Ltd.’s telecom unit elsewhere in Asia.
Sources reported that to execute its business expansion in Indonesia and digital payment policy, Facebook had been in separate talks to partner with Gojek, which counts the Alphabet’s Google and Chinese e-commerce JD.com among its backers.
One person with knowledge of the matter said, “The talks could lead either to a strategic partnership, a collaboration, or an investment.” Gojek, having evolved from a ride-hailing service founded in 2010 to a one-stop app offering online payments, food ordering, and even massage services, is currently valued at $10 billion.
OVO’s CEO Jason Thompson said, referring to a new move of Facebook’s digital payment service in Indonesia, “As an open ecosystem platform, we’re always seeking new partnerships to increase cashless transactions… including with Facebook.” However, Gojek declined to comment while LinkAja was not immediately available for comment.
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