1. 1 SEPTEMBER 2013ADVANCING INSIGHTS ADVANCING COMMERCE
Cashless payments in Indonesia account for only 31% of the total value of consumer payments. This is shown by
the Share Indicator. The Share score puts Indonesia in a category of countries we describe as “Inception,” alongside places
like Nigeria, Russia and Colombia. These countries have only just begun to move away from cash. Only 20% of Indonesians
over the age of 15 have bank accounts, and only 11% have debit cards, however this does not necessarily mean that a move
away from cash is impossible. Other markets show that new technologies such as mobile payments can act as substitutes
for bank accounts and payment cards, and offer shortcuts on the cashless journey.
The Trajectory Score of 23 for Indonesia indicates that some progress away from cash is happening. Small
reductions in cash share of consumer payment value occurred between 2006 and 2011 but this does not appear to have
favored any one payment instrument, as small share growth was seen in cheques, credit cards, debit cards and direct debit.
Indonesia’s Readiness Indicator score was 24, slightly better than Nigeria and Egypt, but worse than Russia and India.
Readiness is a composite of macro-economic measures found to be correlated to consumer cash usage. Improvements
to Readiness will be a matter of prioritization, as challenges include poor availability and affordability of financial services,
infrastructure challenges, poor ease of doing business scores and lack of merchant scale.
% of Population With a
Bank Account: 20%
Debit Card: 11%
Consumer Payments:
2011: $811 bn (USD)
2006: $380 bn (USD)
The Cashless Journey Study measures nations’ progress in evolving consumer payments from cash to cashless. The study
evaluates 33 countries from five regions, including both developed and developing nations.
The study measures three indicators of progress along the cashless journey:
1. Share: a calculation of the share of non-cash consumer payments of the total value of consumer payments
2. Trajectory: a measure of the shift in cash share of consumer payments’ value between 2006 and 2011
3. Readiness: a measure of the potential for conversion of cash payments to electronic payments.
The Cashless Journey findings for Indonesia are:
MasterCard Advisors’ Cashless Journey
Share
Indonesia Indonesia Indonesia
Trajectory Readiness
Highest
0
10
20
30
40
50
60
70
80
90
100
Mean Lowest
31
93
52
7
Highest Mean Lowest
23
100
24
10
Highest Mean Lowest
24
91
57
19
CASHLESS PAYMENTS IN INDONESIA ACCOUNT FOR 31%
OF THE VALUE OF ALL CONSUMER PAYMENTS.31%
Spotlight on...
INDONESIA
GDP:
2011: $846 bn (USD)
2006: $365 bn (USD)
Cashless Journey Spotlight

2. 2 SEPTEMBER 2013ADVANCING INSIGHTS ADVANCING COMMERCE
SHIFTING SHARE WILL REQUIRE A FOCUS ON FUNDAMENTALS
In Figure 1, we see Advisors’ estimates for instrument share of consumer payments by volume and value for
Indonesia. Cash clearly accounts for the strong majority of both the value and volume of transactions here. In
Figure 2, we see that Indonesia is reducing cash usage at a pace that is expected, given its Readiness score.
China and Kenya are shifting cash at a faster pace than would be expected, given their low Readiness scores.
The rapid shift in China can be attributed to a strong government focus on growing electronic payments and
rapid urbanization. In Kenya, it is the disruptive solutions like M-Pesa that are removing barriers to financial
inclusion, by substituting mobile phones for formal bank accounts. Spain, Taiwan, Japan and Germany are
moving at slower pace than indicated by their Readiness scores. Other factors, such as cultural attitudes
or economic conditions may explain why these countries are not shifting away from cash as quickly or as
thoroughly as might be expected, given all the typical factors appear to be in place to do so.
Cashless Journey Spotlight
With a low Readiness score indicating many of the macro-economic prerequisites for going cashless are absent,
Indonesia may benefit from non-traditional routes to expanded cashless payments such as those seen in Kenya.
Payment providers in market are working with telecommunications providers to develop electronic wallets,
which will circumvent the traditional need for a bank account to pay without cash. Other initiatives in Indonesia
include prepaid programs to support the Hajj, acceptance expansion initiatives into heavy cash categories like
petrol, groceries and taxis, and efforts by banks to promote use of debit cards at point of sale.
Figure 2
Some Countries Are Going Cashless
Despite Low Readiness, While Others Remain
Cash Intensive Despite High Readiness
Countries where cashless
share is growing despite
low Readiness Indicators
Countries where cashless
share is in line with
Readiness Indicators
Countries where cashless share is
smaller than would be expected,
given Readiness Indicators
China
Australia
Belgium
Brazil
Canada
Colombia
Egypt
France
Greece
India
Indonesia
Italy
Korea
Malaysia
Mexico
Germany
Japan
Spain
Taiwan
Netherlands
Nigeria
Peru
Poland
Russia
Saudi Arabia
Singapore
South Africa
Sweden
Thailand
UAE
UK
USA
Kenya
Source: MasterCard Advisors analysis, BIS CPSS, McKinsey Global Payments Map, World Bank Statistics
For additional insights, please visit insights.mastercard.com and mastercardadvisors.com.
©2013 MasterCard. All rights reserved. Proprietary and Confidential. Insights and recommendations are based on proprietary and third-party research,
as well as MasterCard’s analysis and opinions, and are presented for your information only.
Mix of Consumer Payment Instruments
(Value and Number of Transactions)
% of Value of
Consumer Payments
% of # Consumer
Payment Transactions
Figure 1
Cash
Cash
Cheque
Credit Card
Credit
Transfer
Direct
Debit
Other
Debit
Card
All other payment
types <1%
MPESADirect Debit
0%
10%
20%
60%
30%
70%
40%
80%
50%
90%
100%
= CASH
= CHEQUE
= CREDIT CARD
= CREDIT TRANSFER
= DIRECT DEBIT
= DEBIT CARD
= OTHER

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