1. Startups

Atome's Omnichannel Strategy Brings 60% of Total Paylater Transactions from Offline Outlets

Exclusive interview with General Manager of Atome Indonesia, Winardi Wijaya, discussing the business model, value proposition, and the next target in 2022

Buy-Now-Pay-Later (BNPL) or familiarly called paylater is now a variant fintech which is quite popular in the Indonesian market. Based on the results of a survey published in Fintech Report 2021, paylater became the second favorite product (68,9%) after e-money (80,2%). higher than cashloan (53,1) wealthtech (44,7%), and (38,3%). It is also suspected that credit card penetration is still minimal, while the need for installment payment methods is increasing.

Atome (PT Mega Shopintar Indonesia) is here to present a platform paylater to handle a variety of payment needs, both in stores online nor offline. Since arriving in September 2020, Atome has partnered with 400 online/offline merchant, including 5.500 outlets belonging to MAP Group, Giordano Group, Matahari, M&M, etc; also service E-commerce such as iStyle, JD.id, Agoda, Zalora etc.

The paylater market in Indonesia has also been served by several other players, such as GoPaylater, Shopee Paylater, Kredivo, and several others. However, each player has its own value proposition that is presented to its users.

To explore the unique strategies and values ​​that Atome is trying to present in Indonesia, DailySocial.id had the opportunity to chat with Atome Indonesia General Manager Winardi Wijaya.

Approach omnichannel

Since its inception, Atome has taken a different approach to handling payments to E-commerce and outlets in shopping centers – although some players are now also following suit.

Regarding this strategy, Winardi said, “I highlight how we are a service platform omnichannel since attending for the first time. Our services can be easily integrated into point-of-sales physical, website, or even mobile app. Usually other players may focus on share payouts E-commerce, but we also support our partners regularly offline. "

Service presence Atom in traditional retail outlets payment systems are also seen as an effort to help businesses transition to channels online, especially to overcome the decline in visits due to the pandemic. “For partners merchant who lack technological knowledge, we provide integration support omnichannel through platforms like Shopify, Woocommerce, and other payment service providers to digitize and drive traffic to their stores.”

The Atome team also provided assistance by presenting special officers at merchant to ensure the process of using technology runs smoothly. And not only providing a platform, it was also conveyed that between Atome and its partners there is also an initiative to carry out marketing activities and Branding together.

“Currently 60% of all our transactions come from partners offline merchant, while transaction online reached around 40%. As we emerge from the Covid19 pandemic, we see consumers returning to physical shopping centers and retail outlets. In the recent 11/11 & 12/12 program campaign in 2021, Atome also drove sales for partners merchant "We increased it 10 times," added Winardi.

Adoption paylater in physical stores

General Manager Atome Indonesia Winardi Wijaya / Atome

Another reason why Atome chose this approach, they believe in shopping activities offline still has a large role in all transactions in Asia, including Indonesia. Physical shopping is still considered to be a social activity that is in great demand by the public -- for example, to get direct experience of seeing and touching products before buying. In addition, the model omnichannel It is also felt that it is increasingly needed by today's young shoppers to produce a more flexible shopping experience.

"Today's digitally savvy, young shoppers are going through different stages of life (e.g. marriage, first job, first home, first child). They also want a shopping experience that is omnichannel which can allow them to have the flexibility to shop and purchase better quality products, managing their budget but not wanting to go into debt."

Winardi continued, "Consumers from Atome Indonesia can get a lot of benefits. Consumers can easily make payments via the mobile application by just making check out website or in front of the cashier merchant We divide payments over three or six months, with no down payment and 0% interest."

He explained an example of the payment mechanism. When someone makes a transaction for their clothes, they are usually charged the full payment of IDR 900.000,00. However, if you use the Atome application as a payment method, the total transaction can be divided into three payments: IDR 300.000,00 within 30 days after the transaction takes place; Another IDR 300.000,00 will be paid within 60 days after the transaction; The remaining IDR 300.000,00 will be paid 90 days later. So, merchant paid in full IDR 900.000,00 minus transaction fees within H+1 working days.

"From a consumer perspective, it is clear that this can give them the flexibility and convenience to make payments digitally, and with a platform that can help them manage their finances and manage their expenses intelligently," he explained.

Process payments with the Atome / Atome application

Atome business model

Atome says that its services are completely free with 0% down payment and interest for users to use with timely payments and this applies to transactions with partners merchant and online.

Admin fees charged only for missed payments of the available time, namely IDR 80.000,00.

Explained in more detail, Atome's business model works by charging partners merchant for services, not consumers. This is the basic difference between Atome and other P2P loan/credit card products.

“We charge a nominal merchant discount rate (MDR) for each completed transaction. But in return, partners merchant received full payment (minus MDR) in less than 2 business days, and it has been proven time and time again that Atome helps drive business growth and traffic for partners merchant us," explained Winardi.

From existing practices, partners merchant experienced an increase of up to 30% in average order size -- as well as increased conversions to purchase, as customers have been given the option to make payments using easier methods. On the other hand, average basketball size serviced worth Rp. 500.000,00 to Rp. 700.000,00 so that the risk of accumulating large debts can be minimized.

“We have the widest market coverage in Asia, and can support merchant We are big in Indonesia and want to expand throughout the region. For example supporting IUIGA to expand from Singapore to Indonesia [...] We also encourage organic leads to partners merchant us through the content we provide. "Not only does it provide shopping tips, but it can provide inspiration for users."

Next target

Atome wants to expand coverage across various types of merchants / Atome

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Atome is part of Advanced Intelligence Group who also operates the service p2p loans Smart Credit and platform e-commerce enablers Ginee. The group of companies also currently has a valuation of more than $2 billion after series D funding in September 2021 worth more than $400 million from Softbank, Warburg Pincus, Northstart and other investors.

“One of our key strengths is also risk management technology and robust, accurate credit profiling, and that's the core expertise of Advance Intelligence Group. "Through technology, we can minimize risk while encouraging financial inclusion and access and availability of services from quality brands," explained Winardi.

Armed with a validated business model and support from the parent company, Atome will target many agendas to be achieved in Indonesia in 2022.

“We will continue to strengthen brand awareness for Atome in Indonesia and deepen the network merchant we are in fashion, lifestyle, as well as partners E-commerce. We are seeing strong demand from consumers and will expand our presence to collaborate with partners merchant from the electronics, F&B, health and payment for transportation sectors. "Apart from that, we will expand our offerings including in tier 3 and tier 4 cities," said Winardi.

To support this target, a number of collaborations also continue to be strengthened. Currently there are several strategic partnerships in place, for example with StanChart to distribute financing worth $500 million. This collaboration has been going on for 10 years with the group of companies. Apart from that, cooperation with local banks is also encouraged, for example with Motion Banking.

So far the Atome application has been downloaded by more than 5 million users in Indonesia. From existing statistics, 70% of Atome users are aged between 26 and 45 years, and more are female users. Most of them are active social media users who are digitally savvy and use smartphones.

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