 Hello everyone. Thanks for coming in. I'm Chinmay, currently a product manager at Grab. I was not here at the pitch before but I'm sure you saw two pretty ladies trying to pitch a lot of things which I worked on last night. So the topic for today is one of the hottest topics that is going on in Southeast Asia which is payments. So and especially payments in Indonesia so I'm going to talk about it. The agenda is that why Indonesia needs online payments which are the major players and innovators in Indonesia as of now. What's happening in China and India and lastly the opportunity for payment disruption in Indonesia. While I'm at each section I'm going to ask you guys for any Q&A so that you don't have to digest so much all at once and then you know shoot at the end. So if you have any questions feel free to shoot. I'm going to pause that in the middle. So why Indonesia needs online payments. So Indonesia is the fourth largest economy in terms of population and 16 largest in terms of GDP in the world and it is undoubtedly the biggest economy in Southeast Asia. Jakarta if anyone has been there is a crazy huge city with 30 million extended urban population. Despite all of this eugeness only 36% of the 260 million Indonesians have bank accounts and only 2% of the people have credit cards. This is surprisingly low number when you compare it with other economies and for online purchases that happen in Indonesia when people and if they're not cash on delivery most of 80% of the times people rely on bank transfers and bank transfers because of its nature traditional nature the banks in the way which banks operate are pretty hassle are a hassle to the merchants and the consumers. So Indonesia needs online payments. I'll highlight two important issues that online payments will help solve in Indonesia. So first is e-commerce growth. So e-commerce strong e-commerce and payments infrastructure complement each other unlocking the payments will be the key to further e-commerce growth. So e-commerce has been growing at a really good rate in Indonesia but if you want to put it at the next level we need a strong payments infrastructure and theoretically it has been proven that if the economy goes cashless then you should see a 2 to 3% improvement in its GDP which is a lot for economy that is of size of Indonesia and mass adopted payment options increase the ease of local and international trade transactions so it again helps the economy. The number two point is financial inclusion. Indonesia has a very poor financial inclusion and it can be attributed mainly to the lack of savings and credit services offered especially to the poor in Indonesia. 80% of the population not exposed to online e-commerce yet and lacks access to proper financial literacy and tools. Upon having more digital transactions and having a strong online payment system we can see that the payment providers can build risk and credit profiles of the individuals and apparently the risky individuals. So there's a reason why banks don't offer credit services especially to the poor they just assume that those people are riskier than the I'm a software engineer my question most likely you might bring up is that when you look at what you stated on your slides it's more conventional method of money transfer so you've got the rise of like Bitcoin or even like for example what's what's happening in East Africa. Okay I'm from South Africa but in the East African they made some electric and Tesla where you use your mobile credit maintenance. Yeah, so I'm not sure if you might bring that up later, but I'll just bring that up later. Yes, that's what I was quite curious, because if you look at even like the M-Team store, and you work on it, you can use your credit for that. Yeah, there's a lot of innovative things happening in Indonesia as of now. I'm going to go look at five major payment players, not comprehensive, but I'm going to talk about it. Yeah, so as I was saying, the online data, once we have a lot of digital transactions, can be used by institutions to categorize people's risk and credit profiles, and then give them access to affordable loans, credit, financial services, so that they can make it big, they can move to the next level, and they can get more opportunities. So any questions so far from the audience before I move on to the next section now? Yeah. I guess this section was regarding why we need online payments, right? Like the need to penetrate the market. So I have a question. In Indonesia or in India, there are no major concerns when it comes to online transaction. One is the security. The average guy is like, you know, everything is online, right? So it can be, and the news outlets tend to hide the security reaches, 10 million accounts, etc. Which is fair actually. So all of those things, yeah, I mean, safety is one of the reasons, but it is not a, it's something that we should overcome because the benefits outweigh the risks in terms of if the economy goes cashless and everyone moves online, it increases opportunities, it increases trade, it increases how well connected the economy is. So, yeah. My question was like, so this concern comes from a con guy, right? Lehman. So how do you convince that Lehman? He can't look at the bigger picture. Yeah. He's not concerned about the GDP. He's just concerned about the money coming out of his own pocket, right? So people still, so people have bank accounts. So they have that trust in the banks. That's one case. It's just a matter of time. You have to prove it to your customers that we are safe, we are reliable and we will not lose your money or we will not do fraud with you. Providers like Gojek or Grab, if you are aware of the players, the biggest ride hailing players in Southeast Asia are moving towards payments and they are seeing great adoption because of the fact that they have established services and trust among their consumers. So it's very natural for them to just bring this 10 million, 20 million users that they have to their payment wallets and then let them transact via that. It's absolutely no-brainer. So you need to establish that sort of trust. I mean, that's true for any kind of service. It's not just online payments. It's e-commerce. It's your financial investments. It's there everywhere. It's a first-time thing. So I'll move on to the next section. Look at the major players and innovators in Indonesia. So first of all, we'll look at the top use cases of online payments. So these are the seven, eight, nine news cases I have. First one is the phone recharge, top-up, food delivery, e-commerce, booking flights and hotels. Transportation is another major use case for payments. P2P transfers sending money to your friends and family. Cross-border remittances, microlending and credit services, financial products and investments. So let's look at one of the first players in Indonesia, Doku Wallet. So Doku was the first payment gateway and online wallet in Indonesia. It was launched 10 years back, 2007. First mover, we can safely say that. So it has come a long way. So Doku Pay is a payment gateway that enables businesses to accept payments from consumers across Indonesia and outside. Then they have, so it's a payment gateway. So the second product they have is Doku Wallet. So this allows consumers to top up their account wallet via ATM, via cash at convenience stores, or by linking up with their credit cards, debit cards. And the consumers can use the Doku Wallet to transact online pay bills without having the need of a credit card or a bank account. And it has seen strong numbers. It processed $2 billion worth of transactions in 2016. It is accepted across 10,000 Alphamart stores. If anyone of you has been to Indonesia, they have a lot of these convenience stores spread across all the big cities, all the small cities everywhere. So it's accepted in all of these stores and has more than 1 million registered e-wallet users. The next player, everyone probably knows about it, Gojek. Gojek is a transportation and lifestyle company focused only on Indonesia. So Gojek launched their online wallet called GoPay almost a year back in April 2016. And it can be used to pay for all the Gojek services across all the variations of the services that they provide. And Gojek has been particularly pushing its online wallet through several promotions, a lot of marketing, and it has seen a lot of adoption across the Gojek consumers. So as per the recent number, it is widely successful. 50% of all the transactions that Gojek does go through their online wallet, which is phenomenal. So how did they manage to do this? So one of the crazy things that they did was they have a fleet of 200,000 drivers across Indonesia. So basically if you take a Gojek, you can pay the driver, take this 100,000 rupiah and top it up to my wallet. So these drivers are basically walking and talking ATMs. You don't even have to go to an ATM. You can order a Go massage and then they'll come to your place and then you just give them, you know, take this and top up my wallet. And then Gojek offers you huge discounts if you use their online wallet. So it's insane. So that's the reason behind this 50% adoption number. And of course you can top up via offline stores, all the alphamards, all the Indomaret, and you can see the credits reflected. You can integrate with all the local banks and directly transfer money from your bank. And GoPay for Merchants is launching this year, as per the news that I read. So it's going to be like a payment gateway for third-party merchants. So third-party merchants can start accepting GoPay as a payment tool, payment option. So Gojek has a lot of maybe 10 million users who are using GoPay, only for Gojek services as of now. From this year probably onwards they'll start using it for third-party e-commerce. And this will enable the millions of GoPay users to go online and shop at other merchants. Grab, yeah. So Grab is Southeast Asia's leading ride-hailing platform and is reportedly developing a mobile payments platform. I am not aware of anything. I'll just read the news. So Grab Pay enables customers to pay via cards, local bank accounts, and other e-wallets such as Android Pay, Alipay. Grab Pay credits was launched last year and it is similar to GoPay e-wallet. So it's a e-wallet where you can top up through convenience stores, through your cards, through your bank accounts, and you can use that wallet across Grab services. Grab Rewards was also launched last year which is basically a loyalty program to collect points and use those points at several Grab partners. So this is meant to increase the stickiness across Grab services and also the partners that tie up with Grab. We announced a partnership with Lipo Group to enable Grab users to pay across all the services that Lipo Group offers. So if you guys don't know, Lipo Group is one of the biggest retail companies in Indonesia and soon you will start seeing Grab's payment options being used at Lipo. Lipo has several retail companies, department stores, hypermarkets, cinemas, coffee shops, and for e-commerce as well. The next interesting player is Kudo. They have done something very interesting. Their mission is to enable every Indonesian to shop online. So they have an agent-consumer model where they sign up agents and these agents are basically people who are savvy enough, who have done e-commerce, who have cards, who have bank accounts, who know how to transact online safely. Kudo has at least 100,000 of these agents who help other consumers who are not so savvy, who don't have credit cards, who don't have bank accounts, or even the basic literacy of how to purchase and transact online. They go to these agents and these agents help them transact, do things online. So this is another very interesting way of penetrating the e-commerce market through existing supply of agents who are savvy enough. So mainly Kudo is targeting consumers without bank accounts or even without internet in small towns and cities, mainly helping them transact online. It is basically enabling online to offline transactions. e-commerce by opening up the e-commerce access to those who would never come online if the service was not there. The last player I want to discuss today is Bank Mandiri. So Mandiri Bank is one of the biggest banks in Indonesia and they launched their e-wallet called Mandiri e-cash and it is one of the dominant players because of the lot of traditional bank accounts that Mandiri users have and also a strong brand name and all of that. So e-cash lets any user, regardless of whether he has a smartphone or not, whether he has a feature phone, they can register with e-cash via simple USSD service and they can transact with that USSD service to do top-ups, do validate payments, money withdrawals from ATMs, things like that. So an e-cash customers don't need to go to the bank to do anything. They can transact via their phone without even having a Mandiri bank account. So you don't need to have a bank account to register with e-cash first. So these two drivers, as you see, they are grab-bike drivers. So grab did a special integration with Mandiri e-cash and this actually saw adoption across consumers and also the drivers liked it because it enables instant cash-outs. So one of the issues that everyone complains about is the cash-out or the bank transfers take at least three days to five days. But this e-cash e-wallet enables them instant cash-outs. So if they own some money today, they'll get it by the end of the day. So that's the beauty of going online and having e-wallets. So any questions so far before I move on? Yeah. They get commissions. From the e-commerce vendors, I guess, from the consumers as well. So if you do like a $10 phone top-up, like let's say Starhub, it's not in Singapore, but I'm just giving an example. So let's say you do the top-up, you will probably get 20 cents. Maybe Starhub will pay you or the end user will pay you. So we already have that sort of model. It's just not crowd-sourced. This is a crowd-sourced model where you, me, everyone can become an agent and start helping other people to come online. It's not just going to be a set of stores, physical stores located across the region. It's people moving around here and there can help you transact online. Any questions? Rumors. This, just because I mentioned Kudo after Grab does not imply anything. It's just coincidence. And I particularly have no idea of what's going on. I'm being honest. Even being an insider at Grab, I don't know what's happening. It's all the news I read on TechCrunch. It's a choir, a choir. It's all rumors. Let's say supposing you are the CEO. What do you see? Make me the CEO first. Let's go ask Anthony then. Any questions? Or should I move on? Moving on. So let's look at China and India, which are another craze. So payments in China, China is one of the most advanced markets in terms of online payments and e-commerce and everything. They have done some phenomenal, crazy things in all the industries that they are in e-commerce, transportation, payments. You call it out if they have done something in each of the area. So in regard to payments, there are three major players. AliPay, WeChatPay, and UnionPay. Top three players. The top use cases that you see are basically you can scan your QR code inside any store in any almost anywhere in China and then you can pay using each of these wallets. You can use the digital wallet for e-commerce while you are at home trying to transact online or on your phone. And then you can do the P2P transfers to your friends. So if anyone was following the new, there was Chinese New Year last month you would have seen like people are sending, what's that called? Hongbao. Yeah, people are sending small Hongbaos with digital red packets to each other, to friends and family. So that sort of thing, it's the use case for this. So, and it has seen market adoption of online payments unlike Indonesia or India, the penetration is really high. People actually prefer to just use the wallet rather than paying cash or do other things. So it is, all of these things are enabling China. China is the closest to cashless compared to India or Indonesia or even US. And it's mobile first. So 80% of the online payments that happen are done via mobile. When we compare this to the US, this US does not do all of its payments or transactions online. People still use test stops, or other larger screens to transact. Yeah, so next thing, major thing is happening in China is the Alipay Revolution. So Alipay is the most used payment app in the world and it's connecting big and small merchants to its 450 million active users on its platform. So it's a huge pool of, it's 2x the population of Indonesia who are on the app to put it that way. So, and it's an all-in-one lifestyle app. You can literally have this one app on your phone and you can use it for transferring money, paying at restaurants, booking flights and hotels, financial investments, booking a taxi, either a didi or a didi. There is no Uber anymore in China. Sorry. Yeah. Food delivery, booking movie tickets, paying utilities, paying at supermarkets, and a lot of other things. And it's not just in China. It has entered Europe. It has partnered with other international merchants. In Southeast Asia Grab and Alipay have partnered and Grab accepts Alipay payments on its platform making it convenient for all the Chinese nationals that visit Southeast Asia for traveling and business purposes. Yeah. I wanted to just quickly go through this screen. So we chat pay so how the QR code operates is as simple as this. So three steps. You just open your app, you tap the quick pay. It opens a QR code. The merchant takes the photo of this QR code and gets the payment the relevant amount of 30 yuan or something. So it's as simple as this to pay with your wallet, with your phone. Next big market, India. So India is trying to move towards cashless but it still does 86% cash transactions. But this will change. This is changing and this will change in the next two to three years to five years we'll start seeing a lot of online payments happening. So cashless is convenient. There's no hassle of change, easier to track savings, do e-commerce. These are these reasons are cited by people who are like vegetable sellers, small merchants, small taxi drivers. They all cite these reasons as the most common reason to use an online wallet rather than dealing in cash. Cashless transactions are possible via other UID-linked phone account without needing smartphone and internet access. I'm not sure if you guys know but every citizen of India has a UID which is a unique national ID and that can be used to give you an e-wallet and then you can use that e-wallet to transact across different services without having the need of smartphone or internet. People are starting to accept e-payments and helping move towards a cashless economy and government itself is investing in training consumers and merchants to move towards cashless. Yeah. I'm quite curious when we talk of India, we talk of China and we talk of Indonesia I presume it's also the class of people who are using the services. I'm quite curious and do you have the demographics as to who actually uses these services? So like if I use Apple Pay I'll presume to be like in my middle age. You think I can use it? Yeah. I'm using an Android phone right now so I don't know how that's applicable but like even Android Pay. Android Pay is still something that I can say from Apple Plus to Apple Plus. Even if for example you're an Android user I think it will be a case of you still need to have like a bank account or whatever so if you have like a low end phone you can use it. So like in terms of the cashless payments as in who are the demographics? That's the whole point of I mean these services which are Android Pay, Apple Pay, they are not really deeply penetrated. You still need a bank account to you know have an Apple Pay. You can't just go and hey Apple Pay how will you deposit your cash in that account? My question is the demographics as the demographics. Yeah so demographics for this for these services, so depends on the service right for Apple Pay and Android Pay as you said it would be most likely the top end users the high spenders who live in big cities but for so it's how you adopt your service to different demographics right. So Alipay, I'm pretty sure they allow you to put cash in your wallet through probably a 7-Eleven you can just give them some money and they'll see their credit is reflected. So that sort of service does not have any dependency on a bank account or a credit card and it can be used on a very low end smartphone or even some of the services that I mentioned like Mandiri eCash you don't need even need a smartphone they enable you to transact via feature phone via OTP validation so all of those things it's all about localization and adapting to the specific demographics so that's what the that will increase the penetration so I'm sure all the major players are trying to move towards that way because all the top level it's not going to increase your service by 10x yes so next thing that India did this year was the demonetization so demonetization basically has led to cash disruption and opened up digital payments opportunity in the Indian market forced adoption towards cashless in a way so which is why we will see more and more transactions are going cashless now and Paytm is similar it has a similar place like that of Alipay it's not that big but it is it will eventually become some somewhat at that scale so it was one of the biggest beneficiaries and it clocked in 1 billion dollar of transactions just in December and so and Paytm recently the transactions on Paytm mobile wallets doubled in just a couple of months and it recently announced plans to go the Alipay way which is basically enable small merchants and traders and even consumers to just pay via QR codes and pay via their app so if I go in a taxi ride I can just like we can just tap our phones together and hey payment is done you don't need to deal in cash it is already happening but you need more adoption across the region so next I will move on in recent year Alipay has been expanding really fast globally by acquiring a couple of companies in India and in Thailand the last one is in Minecraft how do you see that as a trap towards our disruption Alipay has a threat to Paytm a lot of companies how do you see that as a trap or a potential disruption in South East Asia it is it depends on how things move happen this year right like Alipay can integrate with a lot of players but it does not have a strong use case like that of Grab or Gojek Grab and Gojek have people who transact every week who are so you need to have a strong use case and when you start seeing any significant returns it is Alipay is playing the same role as Apple Pay or Android Pay it is at the same level of that it is not deeply penetrated so it is not really a threat to the local players so I will move on to the next section which is opportunity for disruption I didn't go into the demographics but I am trying to show you some numbers so the population of China India and Indonesia internet penetration in China is much higher than India and that in India is much higher than Indonesia internet users growth in India is surprisingly huge 30% compared to China and Indonesia so this also points to the fact that internet infrastructure in Indonesia is not catching up at par with the e-commerce or the online payments and the bank accounts penetration China has almost 80% of the people who have bank accounts India has 53% Indonesia is even lower at 36% so there is a huge this points to a huge opportunity for disruption in Indonesia it is the next big market after China and India ripe for disruption as e-commerce and payments is still very low compared to those two big markets and next good thing is that there is no dominant player like Alipay in Indonesia there are a lot of fragmented players across the region who have significant user user proportion but there is no one big player who has taken the whole market by its own so there is still a lot of opportunity to disrupt this and to come back to this question so there is no one big player because all the players who have e-wallet don't have strong use cases they don't have so Kudo Doku for example was the first mover in Indonesia, it has seen growth it has seen a lot of transactions but it does not have a strong use case like those of consumer companies like for example Tokopedia Tokopedia develops its own Tokopedia is another e-commerce player in Indonesia a billion dollar company if it develops its own e-wallet it will start to see a lot of adoption because they have a strong e-commerce use case so third thing is the Indonesia government is supportive, they plan to move towards a digital economy and you can see all their ministers talking about digital, go digital go cashless in all of their speeches and there has been recent work on the ground for mass adoption of bank accounts across Indonesia and moving everyone to online UID, similar to the way India did, so EKTP is what the project is called another reason is that the traditional banks have not done much in terms of despite having a big base of existing consumers they have failed to utilize the opportunity to bring more and more people online and drive mass adoption of online payments so I like to end with this statement so what we need to, what Indonesia needs to catapult its digital economy to the next level is an online payment system that is widely accepted works smoothly on mobile devices and makes it easy and safe for consumers to pay for things online yeah, that's all from my side, if you guys have any questions please shoot my question is what is the biggest technical or operational challenge to build an e-payment system from user point of view it's just a virtual priority which any game systems have what's the biggest technical or operational challenge okay, I'm not an expert in building payment systems but I would say the risk and the security and the fraud part of it when you integrate with 10 other merchants on the surface as a consumer you will just see one payment option that you are paying for but on the back end side there's a lot of things happening, a lot of fraud checks, a lot of machine learning data science going on to see what are the risk profiles and especially grab if you try to rig the system you will get banned automatically so all of these are challenges which and there is a lot of gaming in payments like there are a lot of frauds which companies lose millions of dollars every month every day so these are the major challenges how do you cater to the fraud and the risks and the security of it, the data security of your transaction thanks for the sharing session so my question is the payment industry is a highly regulated industry and especially when it comes to legal nature it's you know how the government can always change the whole circuitry they back over in one day and they decided that they don't want to back over okay so as a product manager how do you factor all this uncertainty when you design your product so this is a regulatory concern so the product that I work on is related to driver onboarding I don't work on payments if that's what you're thinking but so driver onboarding because the regulations keep changing the way we get drivers and the way we vet drivers to come on our platform also changes and the regulations have been changing if you think about Singapore they have introduced new regulation called the LTA has introduced new regulation for private cars so that's gonna affect the product so things like this you can plan in advance because we already knew last year that this is gonna happen you can make your product you can make your code modular enough to adapt to these changes because you know these are gonna happen some of these you can't if you don't know you can't do anything about it but if you do know then you can plan for it in maybe architectural ways or in some ways thanks for the presentation it was really interesting my name is Abraham I come from Indonesia but I work here so this is very interesting for me so the question would be like you said that there is no major player in Indonesia because there is no strong use case and then the one that you gave example is the Koopie here and then I'm curious with China and India as well like how does Alipay pay a DM started I mean like do they have a really strong use case speak major yeah Gojek and Grab have strong use cases so for example no I mean I'm talking I know the volumes and everything so I'm talking in terms of the volumes that each of the players see so Grab has major use cases like transport like taxi rides, car rides food, bike rides Gojek has more services than Grab has like food, massage clean get your medicines buy from a supermarket basically your driver can do literally anything for you so this kind of stickiness is necessary to have a strong use case like people need to come to your platform again and again and again so that your e-wallet is effective and then you can use that e-wallet at other merchants can you give us a little bit about PTM and Alipay I mean how did they start just a little bit so PTM is very interesting so PTM and Alipay I think started with phone top ups so phone top up is a recurring transaction you have to top up if you are a prepaid sim user then you have to top up your phone every few weeks or every month so that was one of the use case you take some of these use case start bringing people on your platform then you add more use cases like let's integrate with so Alipay has integrated with Didi Didi's service Didi is the major transportation cab-hilling company in China it is 10 times 20 times bigger than Grab or Gojek or any other companies so they have integrations they have increased stickiness through all in one kind of app that you don't need to install other apps so people keep coming it's a one place to do everything so that's how you build stickiness so we just take one last question thank you for the presentation so my question is because we mentioned that e-commerce and payments they are going to be developing together and I know that Alipay actually started by using with Taobao for the payment side so in Southeast Asia, payments and e-commerce seems like two different opinions developing separately so how can you see that why are people not integrating with each other or why are they not in your lines that would be part of the company's strategy I have no clue why Tokopedia is not entering or Travelocca which is another Unicorn is not entering the payments area but you do see players like Gojek and Grab moving towards the... so that's one of the ways to... one of the strategies to penetrate this market so it's a very subjective to company last slide if you want to come work with us finally these two ladies they are hiring