Wawan Suwandi opened his first bank account nine months ago when he became a motorbike taxi driver for Go-Jek, the Indonesian ride-hailing company.
"Before that, I had never felt a need to have a bank account," said Suwandi, in his early 30s, who works from his hometown Tangerang, a Jakarta suburb.
Go-Jek helped Suwandi open the account, allowing him to receive direct electronic payments from customers who use the company's mobile wallet, Go-Pay. "Some drivers may still rather receive their pay in cash, but I think only those too lazy to learn new things. Go-Pay makes [transactions] easier."
Besides enjoying the ease of banking with his smartphone, Suwandi says Go-Jek drivers with good performance ratings can take advantage of other perks. Several banks offer Go-Jek drivers the chance to take out a mortgage or save for hajj pilgrimages. "I'm new at Go-Jek, but I hope soon I'll be entitled to [such benefits], too."
Suwandi is one of the millions of Indonesians who have recently opened a bank account for the first time thanks to new economy companies like Go-Jek. Rapid smartphone adoption and easy-to-use e-payment apps are penetrating Indonesia's vast unbanked population on a scale that the country's traditional banking industry has never been able to achieve.
This is good news for Indonesians -- and their country's economy. The World Bank views access to financial services as a "critical step" toward reducing poverty and inequality. "Financial inclusion allows people to save for family needs, borrow to support a business or build a cushion against an emergency," World Bank Group President Jim Yong Kim said in April.
The rise of e-payments in Southeast Asia's largest economy also represents a massive business opportunity -- a fact not lost on some of the world's largest tech companies and venture capital funds, which have been pouring billions into Indonesian e-payment companies. Investment from big U.S. investment firms such as KKR, Warburg Pincus and Sequoia, along with tech giants like Google, Alibaba Group Holding and Tencent Holdings, have created a frenzied atmosphere in Indonesia's e-payment and fintech industries.
Morgan Stanley said in a report released in May that attractive demographics -- half of Indonesia's population is under 30 -- and improving connectivity is luring foreign funds.
"Investments in this space from technology companies -- such as Go-Pay, Grab and Doku -- have grown rapidly over the past three years," Morgan Stanley said. "A number of these companies are trailing the technology and we believe it is a matter of time before they take off."