More consumer purchases made in cash<\/p>\n
JAKARTA (JP): More than 90 percent of all consumer purchase
\nand business transactions in Indonesia are still made in cash,
\nVisa International country manager Ellyana C. Fuad said on
\nWednesday.<\/p>\n
Ellyana said most of the local merchants were still reluctant
\nto accept payments using credit, debit, charge, or cash cards
\ndespite the fact that the card payment could reduce risk and
\nimprove efficiency.<\/p>\n
"Card payment is aimed at providing a cost-effective way of
\ngaining benefits, thereby creating more efficient and more
\nprofitable business operations," she said at a seminar on the
\nadvantage of card payments.<\/p>\n
Ellyana said merchants accepting payment cards could benefit
\nfrom the lower cost of cash handling, which according to the
\nAsian Banker Journal is Rp 280 to every Rp 1,000 a year in
\nIndonesia.<\/p>\n
This is higher compared to Hongkong with the cost of cash
\nhandling HK$0.09 for every HK$1 and Singapore with S$0.065 for
\nevery S$1.<\/p>\n
"The total cost of cash handling in Indonesia is Rp 6.13
\ntrillion a year," she said.<\/p>\n
Citibank vice president for card product merchant sales
\nHengkie Liwanto said merchants accepting payment cards would also
\nmake the business run more efficiently, and would help increase
\nsales.<\/p>\n
"Cash handling with risks like fraud, fake money, and the risk
\nof transporting money could be reduced," he said.<\/p>\n
Hengkie said paying using a payment card is a lot faster than
\ncash, with an average processing time of 10 to 15 minutes.<\/p>\n
"It also saves on labor and operational costs," he said.<\/p>\n
Chairman of the Indonesian Retailers Association Steve Sondakh
\nsaid many retailers were still reluctant to accept payment cards
\ndue to the high fees the issuing banks charge.<\/p>\n
Hengkie said that the fees were of little consequence compared
\nto the increase in revenues the retailers could achieve after
\naccepting card payments.<\/p>\n
A study on spending patterns of 11,905 new cardholders, in a
\nsix-month period shows that average spending totaled Rp 780,000 a
\nmonth, and 49 percent of the cardholders had increased spending
\nby more than 50 percent, Hengkie said.<\/p>\n
He said in 1999 sales volume for Visa and Mastercard amounted
\nto Rp 11 trillion in Indonesia. This figure will likely grow
\nbecause more and more people will want to pay with cards, Hengkie
\nadded.<\/p>\n
"There have not been a merchant whose sales and revenue
\ndropped by accepting card payments," he said.<\/p>\n
Sondakh said the payment method using credit, debit, charge,
\nand cash cards in various sectors in Indonesia is still low
\ncompared to other countries in the region.<\/p>\n
According Sondakh, only about 21.4 percent of transactions in
\nthe country's hotel industry use payment cards, much higher than
\n14.8 percent in department stores and 2.1 percent in restaurants.<\/p>\n
"This can still be increased, and will increase along with
\nIndonesia's economic growth," Sondakh said.<\/p>\n
Ellyana said Visa credit card holders in Indonesia totaled 1.3
\nmillion people, with 13 member banks including Bank Central Asia,
\nLippo Bank, Bank Bali, BNI, BII, and Bank Mandiri.<\/p>\n
Within the next five years she hopes the number of card
\nholders will reach 12 million.<\/p>\n
"We have bank population of more than 60 million, we are sure
\nto reach the 12 million number in five years," she said. (10)<\/p>",
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"sponsor": "Okusi Associates",
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