If you’ve spent any time in Indonesia over the past few years, you’ve likely been offered a promo while paying:
“Scan and get 50% off!”
“First ride free!”
“Use this wallet and we’ll basically pay you to drink coffee!”
Welcome to Indonesia’s vibrant, high-energy, promo-driven payments market — where cashback was king and growth-at-all-costs was the default.
But things are shifting. Quietly but firmly, Bank Indonesia and the OJK (Indonesia’s Financial Services Authority) are signaling that the era of cashback wars is ending. And that’s a good thing — for everyone.
Why Were Cashbacks So Big in the First Place?
Indonesia is a unique market — huge population, low card penetration, and a strong cash culture. To change user behavior at scale, fintechs and wallets needed to be loud, exciting, and… well, generous.
Cashbacks, vouchers, and discounts became the go-to customer acquisition strategy. And to be fair, it worked.
- Millions of Indonesians adopted e-wallets
- Merchants embraced QRIS (the national QR code standard)
- Everyday purchases — from snacks to train rides — went digital
But here’s the problem: not all growth is good growth.
What’s the Regulator Saying?
The regulators aren’t saying “no more promos.” They’re saying: be responsible.
Cashbacks that distort pricing, create artificial demand, or lead to unsustainable losses are now under scrutiny. Some wallets reportedly burned millions of dollars monthly just to retain market share — often with limited long-term loyalty.
OJK has also emphasized stronger consumer protection, interoperability, and governance — all signs that the industry is moving into its next phase of maturity.
So… What Comes After Cashback?
Glad you asked. Here’s what smart players are doing now:
1. Designing Loyalty, Not Just Lures
It’s time to go beyond one-time discounts. Think:
- Tiered rewards
- Gamified points systems
- Personalized offers based on behavior
- Integration with open loop and closed loop systems
If I get rewarded consistently for using one wallet — even without a massive discount — I’ll stay. That’s loyalty.
2. Focusing on Value-Added Services (VAS)
Wallets are starting to feel like ecosystems:
- Insurance add-ons
- Bill payments
- Micro-loans
- Transit & parking
- Event ticketing
Once a user relies on your app for more than payments, you don’t need to buy their attention with cashbacks.
3. SME-Led Growth
Instead of chasing large promo budgets, more wallets are enabling SMEs with loyalty tools:
- Create offers from the merchant side
- Give businesses better analytics
- Help them retain customers without slashing margins
A cashback doesn’t build a relationship. But a loyalty stamp from your favorite noodle shop does.
4. Financial Wellness & Embedded Finance
Fintech is blending into everyday life. If a wallet helps me:
- Budget better
- Access small-ticket credit
- Split payments with friends
…I’ll stay even without a discount. That’s real utility.
TL;DR: The Burn Is Out — Now It’s Time to Build
Indonesia’s payment players are waking up to a new reality:
- Fewer freebies
- More fundamentals
- And a strong nudge from regulators to grow up
Cashbacks brought people in. Now the challenge is to make them stay — for reasons deeper than discounts.