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1 August 2019

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Indonesia is a cash economy with credit card usage limited to about one percent of the population. "The low adoption of credit cards is mainly due to stringent rules on credit card eligibility by the Central Bank of Indonesia," according to our Digital Finance service. "These rules are more inclined to make banks issue credit cards to high-income customers. On top of this, the Ministry of Finance issued a circular in February 2018 requiring all credit card issuers to provide data on their customers to the ministry to be used for gathering tax information." However the arrival and fast update of ridehailing services GoJek and Grab are changing the game. Initial excitement at the potential for financial inclusion soon turned to alarm at what this might do to the banking sector. Now the government says it will relax banking rules to encourage foreign players into the market. "The Financial Services Authority, known as OJK, expects to amend the so-called single presence policy later this year, according to Heru Kristiyana, commissioner for banking supervision at the regulator", writes Bloomberg. "The revised rule, which will make no distinction between foreign and local lenders, would relax the longstanding requirement that the acquiring banks have to merge all their local operations into one entity. 'The single presence policy will be flexible so that there's consolidation and our banks become more efficient,' Kristiyana said in a recent interview in his Jakarta office." He added that foreign banks are still interested in coming to Indonesia because the net interest margin is still high at around 5 percent.

African telecom Africell plans to expands its infrastructure and network as it eyes financial services in Angola, Uganda, Zimbabwe and the Congo. "Dalloul said Africell would bid to become the fourth operator in Angola, which was expected to reissue a tender in the next two months after the original tender for the licence was annulled in April," reports Reuters. Africell sees potential particularly to challenge incumbents in countries such as Angola, where there is a large state-run network. "Day one, we can just change the whole thing ... drop market prices, expand into rural areas, provide faster, better service on internet," said Mr Dalloul. "These are the things we know how to do. So that's why we are keeping an eye on Angola".

Buy a taxi these days and everyone thinks you're making a fintech play to take on Standard Chartered. OPay continues to move strategically in Nigeria, launching motorcycle taxi service ORide. "From the surface, Opera is coming for the likes of MAX Okada and Gokada. The endgame for Opera is obviously payment and not e-hailing as it seems," writes Techafrica.com. "Ride-hailing is one of the features on the OPay mobile app. It just seems like the right product to launch the payment platform for brand visibility. Even the sign on ORide riders' helmet is OPay's logo and not that of ORide."

WhatsApp is trialling new features in India and now news comes that the popular KaiOS will allow feature phone users to get on the platform. "The functionality was first introduced in India in September last year and now it is being expanded to other feature phones across the world, including Africa, Europe, North America, Southeast Asia and Latin America. With the latest update, feature phones running on KaiOS and sporting either 256MB RAM or 512MB RAM will be able to support the app. 'KaiOS has been a critical partner in helping us bring private messaging to smart feature phones around the world. Providing WhatsApp on KaiOS helps bridge the digital gap to connect friends and family in a simple, reliable and secure way.' WhatsApp COO, Matt Idema said in a statement," according to Indiatoday.com. Hat tip to Niti Bhan for the link.

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