Telkomsel aiming to change lifestyles with TCash

By Ervina Anggraini February 8, 2016

Will expand the service to four cities
Targeting public transportation, parking, tolls and taxis

Telkomsel aiming to change lifestyles with TCash

ACCORDING to the Mobile Money Adoption Survey by the GSM Association (GSMA), there were 255 live mobile money services in 89 markets around the world in 2014, compared with 233 services across 83 markets at the end of 2013.

Mobile money or the mobile wallet – where you conduct transactions using your mobile phone, in case you’re wondering – is maturing in many developing economies, including Indonesia.

In the republic, both banks and telcos are coming on board, spurred by central bank and industry regulator Bank Indonesia announcing its National Non-Cash Movement (Gerakan Nasional Non-Tunai/ GNNT) in August 2014.

One such telco is PT Telekomunikasi Seluler Tbk (Telkomsel), which actually first launched its TCash service in 2007 using the USSD *800# short code, but relaunched it last October, now armed with Near Field Communications (NFC) technology and an app.

“The new TCash aims to support the digital lifestyles of our customers, as well as to support the Government’s GNNT programme,” says Telkomsel chief executive officer Ririek Adriansyah.

TCash is aiming at two segments. The first is obvious enough: The lucrative lifestyle market, populated mainly by youth.

Then there’s what Telkomsel describes as the ‘empowerment market,’ where it aims to tackle financial inclusion by providing money services to the unbanked.

The main mission? To change customers’ payment habits.

With the mobile wallet, Telkomsel customers can conduct both online and offline transactions, whether it is to make funds transfers or pay their bills, by just tapping on the TCash sticker on their phone.

Telkomsel general manager of digital payment and banking products development, Herman Suharto, claims that in the three months since its launch, the new TCash app has garnered more than 300,000 active users.

These users spend an average of about US$4.80 per transaction, and conduct at least two transactions per month.

“We are convinced our active users will grow up to four transactions per user per month,” says Herman.

To increase TCash users, Herman says the team will be focusing more on existing Telkomsel customers, targeting six million of its 150-million strong subscriber base.

“To achieve that target, we will expand the service outside Jabodetabek, especially in big cities like Bandung, Surabaya, Medan, and Makassar,” he says.

Jabodetabek is the administrative term for the metropolitan areas of Jakarta, Bogor, Depok, Tangerang, and Bekasi.

Mobile money is also an ecosystem play, and Herman says Telkomsel is collaborating with 60 merchants across three million outlets, and expects more to come on board this month. The telco is targeting 33,000 new outlets.

Telkomsel also intends to integrate TCash with transportation services, especially PT KeretaApi Commuter Jabodetabek (electric train) and PT Transportasi Jakarta (TransJakarta bus).

“Transportation will be a key vertical for us this year – we are already in discussions, and our technical support is ready, but we have yet to hash out the business details,” says Herman.

“Developing the service further and growing the ecosystem will be our focus this year,” he adds.

Digital lifestyle

Based on a Telkomsel straw poll of 200 respondents, about 70% of its customers prefer to pay with cash, while 98% are unbanked.

Not surprisingly, Herman (pic above) believes that there is a huge opportunity to introduce people to non-cash payment solutions.

“If we’re talking about volume, it is still small, less than 1%. But we will try and encourage users to increase the transaction size.

“We expect the biggest growth area would be transactions at convenience stores, where people make purchase for their daily needs,” he says.

But the company will also be looking at other initiatives, such as using TCash to pay parking fees, taxi fares and tolls, he adds.

TCash users can also use the app as an e-wallet and cash out money. In the future, TCash would be integrated with Telkomsel’s T-Poin loyalty programme, making it easier for Telkomsel subscribers to convert their points into TCash deposits.

Telkomsel has a partnership with the Indomaret convenient store chain where TCash users can get cash using their TCash app at the store’s ‘electronic data capture’ (EDC) machines.

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