Indonesian E-wallet firms incorporate investment features to woo young investors

JAKARTA (The Jakarta Post/ANN): Indonesian e-wallet firms are aiming to tap into the rise in the number of young investors during the pandemic, by partnering with investment platforms to offer ease of access to invest in products like mutual funds and gold.

Digital financial services firm OVO (Visionet Internasional) is the latest e-wallet player to partner with a mutual fund e-investment platform.

The company announced on Tuesday (Jan 26) that it is collaborating with investment marketplace Bareksa to provide an “invest” feature within its mobile application.

“There is a lack of a seamless investment platform to bring investing to the next level. This new feature is part of our commitment to creating affordable, reliable and comfortable investment management, especially for novice investors, ” OVO president director and Bareksa CEO Karaniya Dharmasaputra said in a virtual press conference.

New investors can spend as little as Rp 10,000 (71 US cents) to buy the platform’s exclusive investment product called Manulife OVO Bareksa money market mutual fund (MOBLI), which is managed by investment management firm PT Manulife Aset Manajemen Indonesia.

The users can also top up and withdraw their investment from OVO’s platform faster than the usual wait time of up to seven days, Karaniya said, adding that such a feature was expected to appeal to younger investors.

Prior to OVO, Bareksa also established partnerships with e-commerce platforms like Tokopedia and Bukalapak back in 2018 and 2017, respectively, as it set its eyes on young investors.

The Covid-19 outbreak has enticed young people who are stuck at home with extra money and time on their hands, to start investing.

According to data from the Indonesia Stock Exchange (IDX) and the Indonesian Central Securities Depository (KSEI), 3.87 million single investor identifications (SIDs) had been issued as of Dec 29 last year, a 55.83 per cent year-on-year increase from the total SIDs at the end of 2019.

This includes investors in equities, bonds and mutual funds. Technology has played a role in the popularity of investing among young people, as more than half of the investors joined through fintech platforms and more than 70 per cent were below the age of 40, according to KSEI.

Meanwhile, collaboration between e-wallet and e-investment platforms has flourished over the last couple of years. Last year, e-wallet LinkAja collaborated with investment app Bibit in offering money mutual fund investment on LinkAja’s platform.

Users can also buy investment products for as little as Rp 10,000 on the platform.

Bibit, which has just booked US$30 million in new funding, says it has experienced significant growth with more than 1 million first-time investors registering with the app in the past year alone.

Meanwhile, other digital wallets namely GoPay and DANA have also partnered with online gold-investing platform Pluang.

In August last year, DANA launched a gold investing feature on its application called eMAS. Despite a recent dip in price, gold has also been a sought-after investment product throughout the health crisis, amid the surge in gold prices and investors fleeing to safe haven assets from the volatility of riskier investments.

Gold futures had increased by around 16 per cent year-on-year (yoy) to $1,836 per ounce on Thursday, after a rally last year that went as high as $2,058 per ounce in August.

DANA cofounder and CEO Vince Iswara said on Thursday that in the last three months, eMAS had seen a more than two-fold increase in the number of gold investors.

“The development of other investment instruments is part of our aspiration this year, so we are planning to launch it in the first half of the year, ” he said in a statement.

Meanwhile, decacorn Gojek’s e-wallet GoPay also launched an-app gold investment feature called GoInvestasi in June last year.

GoPay’s managing director Budi Gandasoebrata said that since its launch, GoInvestasi had seen an almost eight-fold increase in users to date. GoPay can also be used to pay for investments in various e-investment platforms, he said in an email on Thursday.

“We see that people’s interest in investment is growing. Looking forward, we are open to developing or adding more features according to consumer needs, ” Budi added.

Meanwhile, Center for Indonesian Policy Studies (CIPS) researcher Siti Alifah Dina said that collaboration between online platforms was becoming more common as consumers shifted to cashless payment amid the Covid-19 pandemic.

She went on to say e-investment platforms could also promote their products through e-wallets as a way to increase their outreach and increase the number of investors, as opening investment accounts becomes quicker through online platforms.

“However, there needs to be an effort to increase digital literacy and consumer empowerment to prevent losses due to a lack of proper investment knowledge, ” Dina told The Jakarta Post on Wednesday.

She also said that platforms needed to pay attention to consumer data protection as data transfers between collaborating or merging companies was not regulated.

Online platforms must first ask user’s approval to share their data. “

The risk of data leakage will be higher as personal data dissemination increases and more and more parties can access it, ” Dina added.- The Jakarta Post/Asia News Network

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