Cyber risks surge with Indonesia’s evolving payments landscape

By Puja Sharma

The report warns of the increased fraud and cyber risks due to the fast-evolving payments landscape. Online fraud is the second largest category of police reports in Indonesia, and a high percentage of internet users have been victims of fraud.

Indonesia’s pandemic-induced boom in eCommerce will continue, with transactions climbing 128% to reach $89 billion in gross transaction value between 2023 and 2026. Indonesia’s projected ecommerce transaction value in 2026 is also expected to eclipse those of its neighbours – Vietnam ($33 billion), Thailand ($26 billion), and the Philippines ($17 billion).

The rosy forecast comes in a new IDC report commissioned by the leading payments platform 2C2P and the global membership association for payments and fraud prevention professionals, Merchant Risk Council (MRC).

The report also highlights how the fast-evolving payments landscape brings costly challenges posed by increased fraud and cyber risks. Indonesia had the highest percentage of internet users (26%) in Southeast Asia who were victims of fraud in 2021, with online fraud being the second largest category of police reports.

Julie Fergerson, CEO of the MRC, said, “With its large, fast-growing, and increasingly online population, Indonesia has emerged as a centre for digital economic growth. As competition in Indonesia’s eCommerce market intensifies, businesses must adapt quickly to changing consumer behaviour while protecting themselves and their customers from the growing threat of cybercrime. This timely IDC Infobrief highlights suitable ways for Indonesian companies to reduce the risk of fraud.”

With online shopping’s growth, mobile wallets play a key role in facilitating online purchases. According to the IDC InfoBrief, “How Southeast Asia Buys and Pays 2022: New Opportunities, Connectivity, and Risks”, Indonesia is adding more than one million new mobile wallet users every month on average, by far the fastest rate among all the Southeast Asia markets.

“As eCommerce grows and payment methods diversify, we need to continuously refine security measures and implement regular updates to mitigate the latest threats to protect merchants and consumers. 2C2P is well-placed to accelerate the development of Indonesia’s digital payments landscape and support top-tier businesses and their merchants seeking to globalise their payment solutions faster than ever in the wake of the pandemic. 2C2P has further strengthened our leadership team in Indonesia to expand and localise our sales, product, and network capabilities across the archipelago,” said Adi Nugroho, Country Head of 2C2P Indonesia.

Key Trend :

• The largest economy in SEA continues to see rapid growth in digital services, making Indonesia the most important market for digital commerce in the region.
• Mobile wallets, Buy Now Pay Later (BNPL), and domestic payments will see rapid expansion in user numbers, with Indonesia emerging as the regional leader.
• Credit card growth remains stagnant, while cash on delivery is declining in use as new digital options emerge.
• By 2026, Indonesia will see a penetration rate of 76% for mobile wallets and 116.8 new mobile wallet users, the highest in the region.
• Buy Now Pay Later (BNPL) added one million new users in Indonesia every 3.2 months on average in 2021, with spending on eCommerce set to soar to $7.3 billion by 2026.
• In markets such as Indonesia where there may be many new users of digital services, the success rate for fraudulent attacks can be much higher due to consumers’ unfamiliarity with transaction and security protocols and processes.