Indonesia is one of Asia’s economic powerhouses and has the fourth largest population in the world. The country’s consistent growth over the years, coupled with its larger number of citizens, has made it an emerging market many have their eyes on — including Singapore-based bitcoin exchange, Bitx.
But like many emerging markets, the country has an inadequate banking system and a large unbanked population. Although the average Indonesian is getting wealthier, financial services have not kept pace. Like many other places around the world, digital currency startups think Bitcoin’s payment network could help the country’s unbanked transact globally and online.
The country is already one of the larger bitcoin markets, but it is still in its early days. Bitx, who operates bitcoin exchanges in Asia and Africa, thinks there is still a large untapped opportunity for bitcoin in the country. The order book exchange expanded their services to Indonesia earlier this month to spur bitcoin e-commerce and remittances in the country.
From Bitx CEO Marcus Swanepoel:
“Indonesia is a key market for us. We already have the widest reach in SEA [Southeast Asia] and Africa of any crypto company but of course, given the sheer size of the market, Indonesia is of great importance. Also because of some very specific market opportunities. Extremely low credit card penetration with massive growth in e-commerce presents particularly attractive opportunities in [the] payment space for crypto-currency.”
Indonesia’s e-commerce industry has boomed in recent years, but the country’s small banking penetration is causing problems for continued growth. According to a 2013 e-commerce report by MasterCard, only 14% of Indonesia’s population has a credit or debit card. Because of the cost and difficulty getting banking services, most items bought online are still paid with cash. Swanepoel says Bitx is looking to partner with local e-commerce companies, BukaLapak and Tokopedia, but nothing has yet to been finalized.
“We had to force our old money systems, like credit cards, to work with the internet in slow and expensive ways. Bitcoin solves the problem and makes it faster and way less expensive to send money to anyone. It’s money, reinvented,” reads Bitx’s website.
Another opportunity for bitcoin in Indonesia could be remittances. With more than $7.62 billion flowing into the country each year, Indonesia is the 15th largest receiver of remittances in the world. However, remittance service providers charge 4%-8% on average, a very expensive price for the average migrant worker. Swanepoel thinks bitcoin’s cheap international payments could be a vast improvement over existing options and a prime use case of the digital currency for the country.
Indonesia has already seen a large amount of interest in the crypto-currency and a thriving ecosystem. Several bitcoin exchanges are currently present in the country, which individually facilitate between $30,000 to $50,000 worth of bitcoin transactions a day. One of the country’s oldest exchanges, Bitcoin Indonesia, enabled Bitcoin payments in over 10,000 convenience stores in September of 2014.
Bitx feels that the exchange has a lot to add to existing bitcoin businesses. The company’s products focus on user-friendliness and is the only mobile service that allows you buy and sell bitcoins through your mobile phone in Indonesia. They are also the only Know-Your-Customer (KYC) compliant exchange in the country.
“We also bring a number of very high quality API’s for developers and businesses that will make it easier for them to offer crypto-related services to their customers and are already in talks with a number of partners there to use these APIs,” said Swanepoel.
Bitx is based in Singapore but operates on several different continents. Founded in 2013, the company has brought their exchange services to Malaysia, Kenya, South Africa and now Indonesia.
In August, the company raised $800,000 in a seed round from Barry Silbert’s New York-based Bitcoin Opportunity Corp, Palo Alto-based investor Carol Realini and others. The company said they are using the capital to expand into new markets; Nigeria, Namibia and the Philippines will be the next countries Bitx enters.
Will remittances be a major part of Bitcoin’s future? Let us know in the comments below!
Photo courtesy of Bitcoin.co.id
Photo courtesy of Bitx.co
Photo courtesy of tourist-destinations.com