Online payments still a challenge for Southeast Asia’s tech players

The adoption of mobile payments and lack of dominant providers in Southeast Asia are among the biggest challenges for technology start-ups hoping to expand in the region, according to a panel of entrepreneurs.

In Indonesia, the region’s largest market with a population of about 261 million, payment represents the biggest problem because credit card penetration is low, as the use of cash and bank transfers remain prevalent in the region, according to Muhammad Fajrin Rasyid, the co-founder and president of Indonesian e-commerce company Bukalapak.

The slow adoption of online payment means that Indonesia’s e-commerce market was still “large and untapped”, said Fajrin, who was part of a panel on Wednesday at the South China Morning Post’s China Conference in Kuala Lumpur.

“Only about 10 per cent of Indonesia’s population have shopped online,” he said, citing payment as the main obstacle and the many users not knowing how payments work online.

The slow online payments adoption also means that companies like Bukalapak and even Klook, a Hong Kong-based travel activity booking platform, have experimented with offline methods to better engage customers.