LinkAja targets 40 million users by the end of the year

LinkAja finally officially launched last week. The joint venture service by state-owned companies comes in the midst of intense electronic money competition, which is currently dominated by Go-Pay owned by Go-Jek and OVO, which is affiliated with the Lippo Group.

After the migration of all e-money users of the Association of State-Owned Banks (Himbara) and Tcash, LinkAja now has 23 million users. LinkAja has set an additional 17 million new users so that by the end of the year the total number of users will reach 40 million.

LinkAja is managed by PT Fintek Karya Nusantara or Finarya, which is a joint venture of four state-owned banks (Mandiri, BNI, BRI, and BTN), Telkomsel, Pertamina, Jasa Marga, and Jiwasraya.

There are many things that need to be realized in the second half of this year, especially referring to the company's main focus on working on community-based services.

What are the strategies and how is the process metamorphosed into LinkAja?

Acceleration with use case daily

In his interview with DailySocial, LinkAja CEO Danu Wicaksana rejects the notion that LinkAja exists as an effort to fight the dominance of Go-Pay and OVO.

"LinkAja is here as complimentary than those already on the market. We don't mean to give Offering which is the same, for example with more promos. We want to give something different," said Danu.

Fintech Report 2018 published DailySocial and the Financial Services Authority (OJK) stated that out of 1.419 respondents, 79,4 percent used GoPay. Meanwhile, 58,4 percent use OVO and 55,5 percent use Tcash services.

Go-Pay and OVO are strong competitors because they are both part of Go-Jek and Grab which has a more service ecosystem. Besides, the two of them have also collaborated with many merchants offline and online accompanied by promos cashback, ranging from transportation, food, to lifestyle.

According to Danu, LinkAja has set a main strategy to focus on services that are the basic needs of the community, rather than increasing promotions on services lifestyle. LinkAja is also supported by the SOE ecosystem, such as the bank network and Himbara ATMs.

He said that his party is still integrating LinkAja so that it can be used in state-owned banks. Currently, LinkAja serves eight product categories, including credit/data, bills, transportation, retail merchants, e-commerce, donations, remittances, and insurance. Now LinkAja is available at 180 payment points and 150 thousand merchants.

"What has been digitized is only the middle and upper-middle segments. In fact, basic services are not yet complete. It's the same with toll roads, we still tap the card, but top upsometimes still have to go to the ATM. We want the elevation to be full digital," he said.

Transport trials to remittances

Danu revealed that several new features have been available since Tcash changed its name to LinkAja. While the rest have entered the trial stage or .

For example, remittance services. Currently, LinkAja has collaborated with Singtel as a local partner for remittances from Indonesian Migrant Workers (PMI). Danu revealed that he had coordinated with Bank Indonesia (BI) and Singapore's official authorities regarding licensing.

Besides Singapore, Danu is also exploring remittances in three other countries, namely Malaysia, Hong Kong, and Taiwan. Meanwhile, for merchant transaction services in Singapore, LinkAja cooperates with switching partner global VIA which also houses thousands of merchants.

"For merchant transactions, we are also eyeing Thailand and Saudi Arabia. Especially for Saudi Arabia, we are exploring cooperation with partners switching different," he added.

From the transportation category, the company has piloted in gate railway station. The plan is, LinkAja will be present in not yet customer presented mode (CPM) where customers don't need anymore scan QR Code in every gate, but the other way around. Users just do shake on the cellphone, then a QR Code will appear.

Currently, this service is only commercially available on the Palembang LRT for the 2018 Asian Games. If it has received permission from the government, this model will be implemented on the LRT, MRT, and Commuter Line at the end of 2019.

Then use sticker RFID at a number of substations pintu toll. This trial has only been implemented in 20 substations pintu toll. For the initial stage, LinkAja will add 200 more substations by the end of this year.

"Problem pintu The toll road has an old infrastructure. When you want to transform to digital with QR Code and RFID, it takes time to upgrade at a time. That's what we're doing. Meanwhile, the CPM model for trains is being studied by Bank Indonesia. The realization also takes time because KAI has to upgrade infrastructure and testing," he explained.

Danu also mentioned use case Another thing that is being prepared is the transaction feature at gas stations which will be implemented at 5.000 gas stations this year. Then, E-wallet which will be LinkAja's automatic funding source without the need top up through the Himbara bank network.

Other features, namely the Agent App and Mini App, are targeted to launch in the fourth quarter of this year. Both are expected to be separate applications with different functions.

The Agent App is designed for merchants or stalls to be able to track funds and sales results online real-time. Meanwhile, the Mini App was developed for B2B partners who want to put their services on the LinkAja platform.

Transforming Tcash to LinkAja

Not only product development, LinkAja has made internal preparations to quickly adapt to the dynamics of the industry. LinkAja will double the number of human resources in 2020 and build R&D for the team in Yogyakarta.

Organizationally, said Danu, LinkAja consists purely of professionals employed from outside SOEs. Danu ensures that every shareholder does not inject human resources into the LinkAja organization.

Danu said that all Tcash employees were chosen to run LinkAja at the beginning of its formation based on the evaluation and decisions of the shareholders. To date, LinkAja has 200 employees, including 80 new recruits from various industry backgrounds, such as technology, banking, and FMCG.

"LinkAja must be different from other state-owned companies so that they give a mandate so that there should be no placement of shareholder [representatives]. With a big vision and mission, we hired professionals outside SOEs," said Danu, who previously served as CEO of Tcash.

According to Danu, the formation of LinkAja occurred through the initiation of the Minister of SOEs Rini Soemarno. This initiation led to a lengthy discussion between Himbara banks and Telkomsel, in which Tcash was decided to be the "embryo" to unify all e-money services onto a single platform.

Then how to convert the Tcash platform to accommodate user migration and features of all e-money?

"Talk payment there always is core platforms. Himbara banks decided the most scalable it's Tcash. That's why from the beginning LinkAja used core Tcash, but keep us improve. The features in Himbara bank e-money are different, so we combine them," he said. 

On the other hand, Danu said that the company is still designing the UI/UX of LinkAja from scratch, which can show the dynamism of the overall features according to the aspirations of the shareholders.