Will Google Wallet succeed in Indonesia?

By | 1 June, 2011

google wallet, indonesiaA few days ago, Google launched its Google Wallet which is a mobile app that enable cellphones to act just like a credit card. With an integrated NFC chip pre-installed (currently only in Google’s own Nexus S), consumers canjust wave their phone in front of a reader in order to make payments. According to Stephanie Tilenius, VP of Commerce and Payments at Google, envisions the cellphone to act as a personal financial hub for coupons, merchant loyalty points, payments and receipts.

There’s no doubt that this will change how consumers buy things online and offline. It will impact the world and Indonesia as one of the fastest growing economies in Southeast Asia. Despite the low credit card penetration in the country, Google Wallet could still impact the credit card growth in Indonesia, if it plays nice.

But still, the question is : can Google Wallet help leverage Indonesia’s ecommerce scene?

Now, there are four things I need to emphasize about Google Wallet :

  1. Smartphones : it’s a mobile app with embedded NFC chip in the device.
  2. Location based : Google will give you deals, promos and offers based on your location data as tracked by the smartphone’s GPS system.
  3. Security : If  you ever lose your phone, Google Wallet has a security mechanism that will prevent someone else from going on a shopping spree using your phone.
  4. Credit cards: The mobile app contains your credit card information.

And of course, all four factors are essential and already working in countries like US, some countries in Latin America, Europe etc, this would probably be Google Wallet’s key in succeeding in further developed countries. One thing missing, and it won’t work.

Indonesia is a huge mobile market. Cellphones are an extension of the arm, one friend said. The behavior of taking a cellphone as a personal connection tool has been going mainstream in Indonesia’s urban cities. This behavior is what makes Indonesia one of the hottest countries for the mobile/internet market, leaving foreign tech companies curious about its potential.

Smartphones, check.

Location-based services are now gaining popularity in Indonesia with local services like Koprol, Urbanesia, PriceArea going mainstream and foreign services such as Foursquare, Gowalla, SCVNGR etc. Lots of e-commerce companies also start to embed location-based features on their services, pushing location-based and mobile technology altogether. With such benefit, no one doubts the success of location-based services in Indonesia in near future.

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