By expanding their range of services and leveraging their extensive network of motorcycle drivers, Gojek seamlessly integrated various offerings and established itself as a provider of convenience deeply ingrained in its market’s consciousness. Capitalising on the widespread use of motorcycles and focusing on the predominantly low to mid-income segment, Gojek’s impact extends beyond ride-sharing, benefiting all the products within its diverse portfolio by harnessing its strong regional expertise. The questions that remain today are what unique value Gojek brings to its growing merchant group and how it addresses the gaps in the existing service offerings?

Payments Consulting Network Research Director, Richard Hartung had an insightful conversation with the Senior Vice President of Gojek, Pratyush Prasanna, delving into the strategies and operational approaches that have propelled the company to new heights.

RH: What are the key aspects and main offerings of your business?

PP: Gojek provides ride-hailing, food delivery and more than a dozen other services to more than 190 million users in Indonesia, Vietnam, Singapore, Thailand and the Philippines. The primary business for merchant payments is payment acceptance for merchants, and we are the largest payment gateway in Indonesia. We provide a majority of the Gojek group gross transaction value (GTV). We provide offline and online acceptance, and payment disbursements. We also provide good ways for merchants to track their transactions, do settlement, and raise concerns. We provide fraud management services, to detect fraud and let merchants know that we have protected them. A value-add service we added recently is merchant loans.

RH: What payments services do you offer merchants and non-profit organisations?

PP: We provide multiple payment options for acceptance. We support 28 payment methods, including credit cards, debit cards, bank transfers, virtual account transfers, and wallets from multiple providers. Third-party gateways provide banking accounts.

RH: Are there any industry sectors or client types that you focus on for merchant services?

PP: While we provide services for all types of merchants, our forte is enterprise merchants. A significant part of our value is for the biggest enterprises. We support 18 of the top 20 e-commerce providers in Indonesia. The largest are Gojek and Tokopedia. We also support some of the large investment crypto players.

RH: From the perspective of merchant services, what would you identify as your main strengths?

PP: Our forte has been that we are very popular among enterprise merchants. In Indonesia, uptime is a problem at many payments companies. Our uptimes and availability and acceptance rates are higher. For uptimes and availability, our systems go down less. For acceptance rates, our transactions fail less because of multiple reasons. If there are credit cards, there is a higher probability our transactions will go through because of a mix of technology, better fraud management, working with banks, and using CyberSource.

RH: What do you see as your key differentiators with respect to merchant services?

PP: Typically, merchant needs are different according to different categories. Bottom to top. Smaller merchants typically look at ease and speed of onboarding. For us, it is a work in progress. As merchants become bigger, they look at rates. Commercially, for MDR, we are equal or better. One other thing is in-house wallets. We have exclusivity for GoPay, the largest wallet in Indonesia. We leverage its popularity and widespread adoption in discussions.

Our key differences are exclusivity, uptime, the acceptance rate of the card, fraud management, and customer service. There are multiple ways we offer customer service using a variety of channels- calls, email, and chat, along with salespeople engaging with merchants through WhatsApp groups and individually. We provide multiple touchpoints.

Lastly, we work with the local banks to optimise their back-end services.

RH: What were your key achievements over the last 12 months in merchant services?

PP: One of the things we have achieved is better onboarding. Initially, ours was not the best. We have created this system of automated onboarding, including KYC (Know Your Customer) procedures. We onboard within 15 minutes, assuming the documents are in the right place. It is like a game changer. Everybody else typically takes a day or two.

Second, we did a lot of house-cleaning. Our APIs are easier and better to integrate to.

Third, we brushed up on support a lot. Our support is world-class compared to others.

These help us retain and get merchants. Enterprises come to us. If your systems are good, everybody benefits.

RH: What merchant services innovations do you have on your product or service roadmap for the next 12 months?

PP: We will continue investing in making onboarding better and more seamless.

We will give a more involved dashboard. We want to give merchants a more data-driven dashboard, that goes beyond a simple list of transactions. They can see all their transactions and see valuable insights. For example, we tell them transactions take place from this time to this time, so they can plan and execute card promotions. We are committed to doing more product-led development based on market trends.

The other improvements are adding a lot more payment methods. Today we have 28. Our goal is to increase this number to 40.

RH: What industry changes or trends to do you see occurring over the next 2-3 years that will have a major impact on your business and on your clients?

PP: One of the trends is the costs of transactions. Merchants are being more aggressive about the Merchant Discount Rates or MDR. MDRs worldwide are reducing. We need to explore better monetisation than only relying on payment processing.

We have more value-adds that give monetisation and stickiness, like better settlement, faster settlement, typically 2-3 days. We offer merchant loans based on merchant needs.

A third factor, industry-wide, is real-time payments. In India, UPI has changed how peer-to-peer payments happen. We are looking at how we optimise it. We can leverage the real-time payment rails in Indonesia and elsewhere.

We will also look at new markets.

RH: What key criteria or features should a business consider when evaluating payments service providers?

PP: Most merchants get stuck at the rates, MDR. Merchants should look at the total cost of operations. Lower rates are appealing but even if the rates are lower, if there is 5% fraud, you have a problem. If the system goes down, it can disrupt business operations. The total cost of operations is difficult to quantify. It is something they should look at. They should look at a combination of rates and the quality of support provided. Third, they should look at the spread of payment methods, and have the payment types their customers need. satisfy the preferences of their customers.

Author: Richard Hartung, Associate, Singapore, Payments Consulting Network

An experienced professional with over 20 years of expertise in the payments and consumer financial services industry, specifically in the Asia Pacific region. He has held various key roles in renowned organizations such as Citibank, Mastercard, and OCBC Bank, and has established his own consultancy, Transcarta, assisting financial services companies with strategy, operations improvement, and market research.

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Payments Consulting Network is one of the media partners of Seamless Asia 2023.

Pratyush Prasanna is one of the panellists of ‘Localising your Online Payments Strategy’ on 28 June 2023. View the full agenda here.

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