Vince Iswara, CEO & Co-Founder, DANA Indonesia
When we met at a local coffee shop in Singapore, DANA Indonesia CEO & Co-Founder Vince Iswara demonstrated to e27 how he used the DANA app to pay for services. “You can now use this to transact abroad at a more reasonable rate,” he said.
This ability, combined with DANA’s profitability, is what he considered the company’s most significant milestone in recent years.
DANA Indonesia is one of the leading digital payment platforms in the country. Beyond payments, the platform has also expanded to include gold and mutual fund investments that allow users to start investing with less than US$1.
In addition to Singapore, Thailand, and Malaysia, users will soon be able to use DANA to pay for transactions when travelling to Japan, China, South Korea, and India.
In this interview, Iswara speaks to e27 about building financial inclusions and what it takes for an Indonesian fintech startup to achieve this. Having reached profitability, he shares the strategy that DANA uses to reach out to underbanked and underserved users in the archipelago.
The following is an edited excerpt of the conversation.
Can you tell me more about the role that a startup plays in promoting financial inclusion in Indonesia? What impact has it had?
The reality is that most of the Indonesian population is either underbanked or unbanked.
But one factor that is not often discussed is that they also [feel] undeserved, meaning that they feel intimidated when they have to go into a bank. This is based on an interview that we have done with some users. “How come you don’t have a bank account?” It is because they feel intimidated. They feel undeserved because banking feels too fancy for them.
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The other factor is that, even when they only have a minimum amount in their accounts, there are usually fees associated with it, which makes people reluctant.
Many startups in Indonesia have provided frictionless access, which means that everyone can open their accounts more easily and seamlessly. We offer e-KYC, facial recognition, and integrations with the civil registry. We also do not charge fees for this service.
For most people, these are the more frictionless way to access banking services. It has been absolutely one of the fastest ways to inclusion. Because once you have your first digital bank account, you can use it for transactions and daily needs. You will then have access to other financial services, from insurance to lending. With that, you will have your credit score built.
The financial services ecosystem provides that. It includes accessibility, literacy, and eligibility for people to access other financial services. This is what we call inclusion.
What changes have you seen in Indonesia since DANA’s inception years ago, especially since the pandemic?
I am not saying that we are the last, but when we first got started, we were the later one to enter the market. So, at the time, it required a lot of marketing efforts to convince someone to try DANA.
What changes now is that people have become more educated about the usefulness and values [of digital payments]; they are willing to try even without incentives. That goes with the maturity and the push from all sectors to embrace digitalisation. Not just the industries but also the regulators.
Are there any remaining challenges that you have to tackle back home?
The challenge is to build a product that fits the customer’s needs and rights. Because, here is the thing: no product can always fit everyone’s needs. For example, the products needed by users in Tier One cities can be different from those needed by users in Tier Two and Three cities.
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Digital payment might be a universally accepted platform, but even then [there are varieties] in its forms.
We need to do things to ensure that [the product] fits more of the user profile so that adoption can happen faster.
Any unique strategies that you are using to adjust between the Tier One cities and those outside of it?
We have to ensure that the product is seamless, easy to understand, and fits their needs.
In Tier Three cities, the solutions that we provided cater to much smaller tickets compared to the other cities. The difference is not in the way the transactions are handled; it is in the merchants themselves. So, if we are targeting lower-tier cities, make sure that your solutions allow users to shop at merchants with lower ticket sizes and more frequent transactions.
Since we are nearing 2025, what are the exciting plans that you have in store?
We aim to expand many of our financial services, creating even more accessibility for the unbanked and underbanked, because we believe this will drive the Indonesian economy as well.
I would say there is an untapped potential for turning informal economies into formal economies. This is one of the biggest tasks as well. It is not just about accessibility and literacy but also about security, making sure that you can trust the platform and the digital ecosystem. So, we are doing a lot of activities related to protection, cyber security, anti-scamming, and anti-phishing.
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Image Credit: DANA Indonesia
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