KualiVa scheme ushers in cashless society

By Achmad Junaidi and Riyadi

JAKARTA (JP): No one can avoid financial transactions, but only a few pursue the noncash alternatives. Noncash transactions, even though they are still below 5 percent of all transactions nationwide, are becoming a trend as more people realize their benefits.

Banks and corporates, which benefit most from such transactions, share the same interests in creating a noncash society.

Bank Bali, for instance, together with six companies, launched the KualiVa program two years ago.

Now KualiVa has grown to be a leading consumer loyalty program, embracing 15 corporates, ranging from retail and aviation firms to Internet providers and laundry services.

KualiVa offers discounts in the form of points -- each worth Rp 1 -- which can be accumulated by buying products or services at any of the participating companies' outlets.

The Jakarta Post interviewed Bank Bali's first vice president, A. Ganda Kusuma, who has being the driving force behind KualiVa from the outset, to get his views about the program. The following are excerpts:

Question: What is the thinking behind KualiVa?

Answer: We are targeting more and more middle-class urban dwellers to adopt a KualiVa lifestyle. First, you plan your spending well. You plot your daily needs and decide when, where and how you are going to satisfy these needs. What we are saying is: 'Please choose quality places'.

Secondly, you pursue a noncash lifestyle. Why noncash: It is easier to control, safer, and more convenient. What we are urging is the avoidance of cash payments as they are risky, costly and burdensome. I suppose the ultimate goal is therefore to create a cashless society.

Thirdly, you benefit not only yourself personally but also society. One day, social considerations will influence consumer spending patterns. When individual needs are satisfied, people tend to start helping the less fortunate. That's an essential factor in a human beings. That will be a strong reason for people to adopt a KualiVa lifestyle.

Q: Some say consumer financing facilities like KualiVa tend to encourage people to be more consumer-oriented. Do you agree?

A: I don't think so. If someone is consumer-oriented, I don't think it is because of such facilities and KualiVa teaches people to be rational consumers, by proper planning of their spending needs.

If you encourage people to spend more than they earn, how long can you keep them as your customers?

I bet you could only keep them until they are so in debt they cannot not pay their back their obligations. What would be the benefit for you as a trader then? Nothing. Therefore, we teach people to control their spending through planning.

Q: You said you want to create a cashless society. Why do you pursue this?

A: Because it benefits everyone concerned. It benefits customers, it benefits producers and it benefits corporates. Cash payments are not a cheap alternative. They are costly and even risky.

If you have a store the size of a Hero supermarket, for instance, you can imagine how much time you have to spend just counting cash from customers. First, the cashier has to count it and record it. Then, at the close of every trading day, all money coming from the cashiers must be recounted. And I can guarantee, there will be a discrepancy, probably of about Rp 20,000.

Then, you must try to find out why there was a difference. After spending some time on it, I bet the cashier gives up and includes it as costs.

Then, where do you store the money? In the store? Or do you take it home? Then, you must insure it against fire or burglary.

That costs even more. The following day, you must take some of the money to your bank, and of course you have to spend more sending the money to the bank, and the bank will recount the money.

So, my point is that cash payments are costly, and risky. Noncash payments, like using credit and debit cards, has many advantages. And KualiVa aims to create a noncash lifestyle.

Q: Do you believe that a social fund aspect to KualiVa is a factor that might attract new customers?

A: Well, initially people would join KualiVa for their own benefit, to gain points which can be transformed into discounts, which they can use in all 15 of KualiVa's partner companies.

But later, when they are better off, they will start thinking of helping other people, especially the unfortunate. And KualiVa has already anticipated this. And this has become a significant factor for KualiVa.

There is no other customer loyalty program in Indonesia which covers this social dimension. And we believe the social dimension, besides environmental considerations, will determine consumer spending in the future.

Q: What do corporates gain by joining KualiVa?

A: Corporates benefit from customers' loyalty. If people shop at a store once a year, they cannot be regarded as loyal customers, they are just incidental buyers. And through this program, we create a system which encourages people to shop at a certain store not only once but repeatedly due to the benefits we offer. This way, we create loyal customers. And of course, this benefits corporates. So, this program is a win-win program, both for the customers, the corporate partners and Bank Bali.

Q: Do you see any potential competitors on the horizon? How do you view competition?

A: Frankly speaking, we currently have no competition. We are the largest costumer loyalty program. There is no other loyalty program to compare us with.

But one day, a competitor will enter this sector because it is a very promising and large market. Anyway, we welcome competition. We believe there must be competition in life because we all benefit from it.

But we have already anticipated the emergence of competitors. We have made a long-term plan and put it into our blueprint as we do not want this program vanishing as soon as it is launched.

This scheme will help us not only to survive the competition but also to grow bigger and bigger. And one day, we will export the idea as a franchise to other countries.