On May 15th 2013, the three major mobile operators in Indonesia: Telkomsel, Indosat and XL jointly went live with a huge milestone in the mobile money industry. It was an update to enable customers of each of their mobile money services to send money, in real-time, to customers of the other network’s mobile money services, directly crediting the recipient’s account.
In most other countries where mobile money is strong, e.g. East Africa, when you send money to someone at another network, that money can only be cashed out at the sending service’s agent network. So instead of potentially triggering further electronic transactions, sending money “off-net” in their case means that no further electronic transactions will happen. With this recent move, Indonesia becomes the first large market to go live with an interoperable solution, a solution that enables more transactions to take place even after off-net transfers, and creates one connected environment of mobile money in the market.
We had a chance to speak with Yessie Yosetya, Head of XL Tunai, and she explains further: Prior to this, each operator only allowed mobile money transfers within its operator, e.g. XL Tunai to XL Tunai only, or Telkomsel Tcash to Telkomsel Tcash, or Indosat Dompetku to Indosat Dompetku. After 15th of May, subscriber from XL can transfer their m-money to either Telkomsel or Indosat subscriber; and vice versa.
In a previous post, we discussed the importance of industry collaboration among mobile money providers in their market. In Indonesia the operators started regular industry discussions among themselves in December last year, and they have been meeting weekly since then. During this time, a common SOP (Standard Operating Procedure) was agreed among all operators for handling customer care and fraud issues across the operators.
The technical development to enable the platforms to talk to each other took about four months. The chosen technical solution was to establish secure direct connections and communicate through a web service, using WSDL, with each platform. It was decidedthat the funds will be settled bilaterally on a regular basis, starting monthly, but will be adjusted depending on the volumes that will be transferred.
Yessie explains why this is happening in Indonesia before other markets: Each of the operators in Indonesia have been trying on its own to educate and drive the adoption in the market. It is in everybody’s interest to move the market forward and we see P2P interconnection as an enabler for this. Our common goal of m-money interconnection is to drive adoption, using the analogy of sky-rocketing adoption of cellular service after SMS was opened for off-net transactions. We calculate that this will increase up to 20% of P2P transactions.
Network theory tells us that, in theory, this number could be much higher as transactions could grow exponentially with the increased number of nodes and connections possible within the system. This initiative shows us that Telkomsel, Indosat and XL are all committed to making mobile money succeed in Indonesia. This commitment together with the recently launched enabling regulation will hopefully help propel Indonesia’s mobile money industry to a rapid growth.
Photo: By smagdali, via Flickr.