Fixed Fees Coming for Indonesia’s E-Wallet Transactions

Indonesia’s central bank is planning to impose fixed fees on some e-wallet transactions in a move that not only eliminates pricing flexibility but could also deter small merchants from participating.

Bank Indonesia is already in talks with the country’s largest digital payment startups to standardize fees on QR code transactions, according to a report citing five unnamed sources.

Indonesia’s internet economy has a bright outlook with a Google, Temasek and Bain & Co report projecting the $40 billion market this year to grow more than three-fold by 2025. The market houses numerous global household e-wallet players including homegrown ride-hailing giant Gojek.

The central bank wants to fix some e-wallet transaction fees at 0.7 percent – a move that could push out smaller merchants on the network that are currently being charged at very levels as an incentive. The would also hit revenue lines from large merchants, like Starbucks, which are already being charged up to 2 percent.

In addition to pushing out smaller merchants and cut revenue from larger merchants, the central bank’s plan would also require e-wallet transaction fees to be split to an additional party: major Indonesian lenders.

Under the new system, e-wallet transaction fees would be split between three parties: e-wallet companies, payment processors and the newly included National Electronic Transaction Settlement consortium made up of major local lenders which were previously not involved.

This will hurt all of us, said one unnamed executive at an Indonesian e-wallet company.