The growth of digital payments and banking in China, where it has become mainstream and spawned numerous on-demand industries, is inspiring companies to pursue similar opportunities across. Indonesia, the world’s fourth largest population and Southeast Asia’s largest economy is a primary focus for many.
Beyond bigger players such as Alibaba, which has a joint fintech venture and other investments in the country, and ride-sharing firm Grab, which is developing a platform of financial services, smaller players are seizing the opportunity to make a dent in Indonesia, where credit ownership is low and many of the 260 million population don’t even have a bank account.
One startup looking to make an impact is Pundi Pundi, a Hong Kong registered company started by one of the founders of HTML5 game startup Wozlla. It wants to step in to offer a scan-to-pay service — akin to Alibaba’s hugely successful Alipay app — that can replace cash-based transactions.
Initially it has started out offering payment options targeted at workers in central parts of capital city Jakarta. Behind the simplicity of scan-to-pay, Pundi Pundi offers a micro-credit systems that lets its users keep a balance of under $40 that can be used with its 600 plus merchants, which span convenience stores, noodle sellers and hawker centers. The balance can be paid, or credit added, via bank transfer, ATM and over the counter at stores.
The aim is to get urban workers comfortable with digital payments with a view to introducing additional services further down the line.
Pundi Pundi co-founder Danny Lim told TechCrunch that the company has racked up over 100,000 registered users, of which around 20,000 are actively using the service on a daily basis.
“Around 50 percent of our users don’t have credit cards, while probably 30 percent don’t even have a bank account,” Lim said in an interview.
Lim explained that Pundi Pundi recently began to offer support for mobile top-up inside its app, and besides widening the number of merchants who support it, there are plans to offer options for paying for electricity and other household bills. The startup opted to focus on urban worker needs — primarily lunches and other office hour spending — to get a foothold and learn about how its service is being used.
Pundi Pundi co-founder Danny Lim
The major focus is to help fill out the black box that is personal finance and banking in Indonesia, and more widely Southeast Asia.
“Data is the most precious thing since 90 percent of Indonesians have no tracking record so the central bank doesn’t even know whose credit is good or bad,” he said. “We hope to have 300,000 users by the end of the year so our data will be more valuable than the central bank’s.”
Beyond Indonesia, there are plans to enter Malaysia — where Lim is from — Singapore and markets such as Vietnam and Thailand.
That expansion is going to necessitate some serious financing, most likely in the form of a Series A funding round. Pundi Pundi has made some progress on that, however, and it just closed a pre-Series A round of $4 million from undisclosed China-based investors this week.
First up, however, the company is in the process of forming some major bonds. Lim said that Pundi Pundi is in discussions with Grab and its rival Go-Jek, the billion-dollar valued on-demand startup from Indonesia, to develop a ‘universal’ QR code system that would allow its merchants and users to scan and make payment via any of the three companies’ services.
Removing these services from a current lock-in could help spread the use of scan-based payment systems and, Pundi Pundi, give it a springboard to grow beyond its current urban worker demographic and facilitate planned expansions to other cities in Indonesia.