1. Reviewing Growth of Mobile Wallet
Ecosystems in Emerging Markets
by :
Ichwansyah Putra
Product Development & Management Manager
M-Commerce and Money Division
PT. Indosat Tbk

2.  Growth of mobile wallet initiatives in
emerging markets
 Opportunities in the mobile wallet space for
stakeholders, especially in under-banked or
un-banked markets
 Identifying control points for mobile wallet
and importance for commercially viable
growth

4. What Next for Mobile Money
 Facts :
75% of people in the world have access to mobile phone

5. More Mobile in Developing World
Most Phones are Owned by People
Living in Low-Income Regions
% National Population
Send SMS
Take Picture or Video with a
mobile
Use Mobile Internet
77%
Developing
Country
29% High-Income
Country
23%
71%
Y 2000 Y 2010
0.7 Billion Subsc. 5.9 Billion Subsc.

6. Micropayment Market in Indonesia
 Indonesian potential micropayment
transaction US$ 20 Billion – 30 Billion
 77% retail transaction mostly done by cash
 Big opportunity to move cash transaction to
non-cash
 Collaborate between Bank and Mobile
Operator can complement each other

7. Economic Highlight
Income & Demography 2007 2008 2009 2010 2011
Nominal GDP (US$ Mio) 432,200.00 510,500.00 540,300.00 700,100.00 806,500.00
Population (Mio) 234.70 237.50 240.30 243.00 245.60
GDP per head (US$ at PPP) 3,580.00 3,831.00 4,006.00 4,240.00 4,509.00
Private consumption per head (US$) 1,170.00 1,302.00 1,318.00 1,639.00 1,845.00
Card Transaction
Card Transaction Type 2007 2008 2009 2010 Nov 2011
Credit Card - Cash Out Volume 4,803,606 5,390,134 4,807,180 4,361,194 3,739,478
Value (Rp.Mio) 3,299,610 3,800,977 4,040,297 4,521,434 4,082,627
Credit Card - Purchase Volume 124,488,918 161,346,501 177,817,542 194,675,233 186,894,827
Value (Rp.Mio) 69,304,597 103,468,544 132,651,567 158,687,057 161,516,969
Total Credit Card Volume 129,292,524 166,736,635 182,624,722 199,036,427 190,634,305
Value (Rp.Mio) 72,604,207 107,269,521 136,691,864 163,208,491 165,599,596
Debit Card - Cash Out Volume 842,791,013 1,012,568,067 1,134,556,744 1,303,272,394 1,460,879,321
Value (Rp.Mio) 559,130,646 696,505,039 791,934,378 925,984,926 1,045,638,738
Debit Card - Purchase Volume 60,492,412 79,618,170 98,178,888 111,720,556 124,542,341
Value (Rp.Mio) 29,383,525 42,813,889 56,171,235 65,317,622 75,964,398
Total Debit Card Volume 903,283,425 1,092,186,237 1,232,735,632 1,414,992,950 1,585,421,662
Value (Rp.Mio) 588,514,170 739,318,928 848,105,613 991,302,548 1,121,603,136
People still use cash instruments in Indonesia—mostly banknotes and coins. Cash cannot be completely replaced by non-
cash instruments, particularly for low-value payment transactions. In 2008, the ratio of cash to money supply (M2) was
11.11%... (Rp. 210,627,712.9 Million or equivalent to US$ 23,403,079,211.11)
© Sep 2009, ADB Institute, Ira S. Titiheruw and Raymond Atje, Payment System in Indonesia
Payment System In Indonesia

8. • Population: 240 million
• GDP per capita of more than US$ 3,000
• In 2009, there are estimated 87-88 mil savings accounts. However, as many
have multiple accounts, the number of account holders is around 60-66 mil
• IFC estimates that in 2009, there were estimated 96-115 mil individual mobile
phone subscribers, growing to 133-180 mil by 2013 (even in fact there are
250 mil mobile phone subscribers in 2012)
• IFC states that the base of bank customers is growing much more slowly than
the number of mobile phone subscribers
• There are 20-30 mil phone subscribers without bank accounts
• Another 20-30 mil mobile phone subscribers with bank accounts and
phones, who’re “underserved” by financial institutions
• Many users find it difficult or intimidating to go into bank branches,
challenging to find and use ATMs
Conclusion: There is significant demand for mobile payments so
long as it meets the requirements of convenience, trust and cost
8

9. Capability of Adoption the System
 Tailoring the business model to suit the type of
product and type of consumer
 Developing a cost-effective solution
 Provide consumers with a secure, widely
accepted and easy-to-use payment method
 The service needs to gain critical mass quickly
 There has to be a fixed focus and it has to be
ensured that all stakeholders are fully aligned
 Service providers need to be mindful of
regulatory requirements
 Service providers need to be able to integrate
data with customer profiles and transaction data

10. Developing E-Money in Indonesia
Developing E-Money in Indonesia
2010
1. Transactions Volume
- e-money = 31 %
- Credit Card = 129%
- ATM Card + debit = 349%
Credit Card
2. Transaction Value
- e-money = US$ 3/trx
- Credit Card = US$ 93/trx
Values
Volume
- ATM Card + debit = US$
126/trx ATM Card+Debit
3. Number of ATM Card + debit =
3.5 x number of Credit Card =
7.5 x number of e-money
VOLUME NUMBER OF VALUES (RP
(MIO TRX) CARD (MIO) BILLION)

11. E-Money Services inServices in Indonesia
E-Money Indonesia 2010

13. IFC survey indicates that, even
for mobile phone users with
bank accounts, a large number
are ‘under-served’ as they find
it inconvenient, costly or
challenging to use bank
channels
Source: IFC Report On Branchless Banking In Indonesia and estimates

14. White Collar 45%
Blue Collar 100%
Home-Maker 80%
Youth 75%

15. Products To Value To Value To
Survey on why consumers would want Focus On Consumers?
to use mobile payments? N=50
Operator?
• Convenience • Value to customers
Air Time Reload • Product Availability • Cost Savings
• Pricing • Recurring Transaction
• Convenience • Value to customers
Bill Payment • Recurring Transaction
• Pricing • Synergy/Partnerships
Remittance • Wide Cash-Out • Value to customers
Network
• Pricing • Value to customers
P2P Transfers • Wide Cash-Out
Network
Convenience, access, reliability and trust will be the key to winning!

17. SMS USSD Applet (J2ME, BB, Sticker
(*789#) Android, I-phone)
Payment
- Matrix Postpaid √ √ √
- PLN Postpaid √ √ √
- Telkom (PSTN), Speedy & Flexi √ √ √
- Cable TV (TelkomVision, yesTV, Aura, Indovision) √ √ √
- Leasing & Insurance thru Artajasa (Q3-2012) √ √ √
Purchase
- Airtime Top-Up √ √ √
- PLN Prepaid √ √ √
- Games On-Line (Zynga, Travian, AsiaSoft…20 games type) √ √ √
- F&B Service Delivery (es teler 77, Dunkin, etc) √ √ √
-Online Purchase internet based (blibli.com, i-surf, deal keren…and more) – Q3- √
2012
- Merchant Partner, phase-1 target +/- 200 edc reader/POS for cash-in and √ √ √ √
purchases (Q4-2012)
Transfer
- P-to-P e-money transfer √ √ √
- Cash-in via all ATM in Indonesia (ATMBersama, ALTO & Prima)
- Cash-in and cash-out via partner for e-money and remittances at POS office √ √ √
(Q4-2012)
- In-bound Remittances from QMM and other (Malaysia, HK, etc) – Q4-2012 √
* The red sentences are services will commercial

18. Convenience Payment :
In Store & Home Delivery Services
• Currently the www.restodb.com has
listed 1129 dining places that provide
delivery service in main cities in Java,
Sumatra, Bali and Sulawesi.
• Home delivery service is part of the
urban lifestyle, and a practical solution
for every one that do not want to deal
with the traffic jam to get their meal.
• However, aside from the increasing
revenue from it, offering delivery
service also make the dining places to
be exposed by the common risk of
carrying cash money around the city.
• dompetku can be the solution to
complete this practical service

19. Convenience Payment :
at Home Services
• The need of easy & simple payment transaction doing from home.
• Reduce the cost of transportation to do a payment “easy and simple”.
• The same aspect that can be addressed with e-wallet is the security. Mobile-wallet
can reduce the risk of carrying cash.

20. Remittance
Key SuccessKey Success Factor – Customer Perspective
Factor Remittances
Key Success Factor: • The well-known player in remittance business are successfully running
1. # of outlet this particular business because they are doing well in these KSF
2. Accommodate • And every player that provide remittance services aims to improve these
specific needs two success factor
Key Success Success Story Improvement/ Development
Factor
# of Outlet ► Western Union has over 386,000 ► Both Western Union & Money Gram were keep
agents worldwide develop the partnership with local banks,
► PT Pos Indonesia has 3,700 online pengadaian and PT Pos Indonesia as their
offices and 24,410 point of sales. agent.
► M-Pesa (Safaricom, Kenya) has ► Withdraw balance through License Agent
nearly 20,000 agents nationwide. Remittances (stores, etc).
► Withdraw balance through certain ATM.
Accommodate ► Most of the money transfer agent ► Emphasize on saving habit, targeting
specific needs targeting migrant worker that Indonesian overseas migrant workers to send
need to send money home. money to local bank account.
► Western Union is used by Google ► Transfer Tunai service offers the sender a
Ad sense to pay its publishers convenience way to transfer fund through
► ATM Bersama offers a mobile application, and targeting the un-
convenience way in transferring bankable receiver by partnering with PT Pos
fund between banks. Indonesia as the cash outlet.

21. Key Success Factor Payment
Key Success Factor: • The well-known player in payment business are successfully running this
1. Building Ecosystem particular business because they are doing well in building ecosystem.
2. Device Integration • The device integration factor is additional key success factor for mobile
payment
• Whoever stand between customer and merchant should offer convenience
and reliability in conducting payment.
Key Success Success Story Improvement/ Development
Factor
Building ► Visa-Master network ► Engagement with various merchant:
Ecosystem connection with many bank ► Benefit from large customer base merchants:
and merchants ►Expand Networked stores
► NTT DoCoMo’s Felica ►Utility provider (Billing payment service by bank &
payment services. credit card)
► PayPal offer a convenience ►Transportation provider (e-Toll, GazCard,Ticket
way to top up the virtual payment by bank & credit card)
wallet by connecting to ► Mandiri prepaid and BCA Flazz offer virtual wallet by
customer’s saving or credit connecting to saving account.
card account. ► Sinar Mas group trying to link their bank and mobile
service through mobile payment (SmartDompet) via
sms which is actually mobile banking service.
Device ► NTT DoCoMo conducts a ► Common mobile banking offer bill payment, banking
Integration strong partnership with the (smartDompet), mobile client (Dompetku, T-Cash,
handset manufacturer to FlexiCash, BSM Mobile Banking)
manufacture the mobile
payment platform

22. Key Success Factor Chain
Have large
subscriber
on mobile phone
Building
Simple comm. thousands
(P-to-P transfer) trusted
KEY agents
SUCCESS
FACTOR
Good
Quick response relationship
to consumer need with regulator
and Banks

23. Micropayment Market Potency
Money Circulation Number of highway
Number of passenger users Game online
Rp 292.98 Trillion
273 thousand/day 294 thousand players
cars/day 6 million
Number of e-
commerce Number of Number of Un-bankable
transactions MRT passenger Indonesian Labour potential market 80
Rp 30 Triliun 344,287/day +/-6 million million users

24. ichwansyah.putra@indosat.com
Product Development & Management
Manager
Div. Mobile Commerce & Money
PT. INDOSAT, tbk