Perception Gap Who are the financially excluded or underserved across Indonesia? Who are the financially excluded or underserved across Indonesia? Huge diversity of this group, both in terms of the people and the way it affects them People can be financially excluded due to circumstances they find themselves in, or because they choose to be Financially Excluded Financially Underserved 38 Average Age 34 I put some money in my piggy bank and the rest with my family member Years Years 5 Male 49% Female Gender 47% Male 53% Female We don t meet the minimum requirement to open a bank account. So we just save in a money box 73% married Marital Status 74% married If I have more Money then I will open a bank account. Otherwise, I will lose out because of the administration Type of Payment Received in Last 3 months 25% 4 Wages Payment from family/ friend Unsecured loans from others 55% 40% 6% 20% 20% 8% Main reason for no full Bank Account Cash is needed daily Do not have enough money High bank minimum balance requirements 3 1 17% Time lived in Jakarta 45% Lived here all my life 43%
Money Management With the huge potential of prepaid to this group, what are the barriers and challenges to them using this method of payment? How do they pay? What is their support network? e.g. friends and family? What would they like to be able to do? And how do some of them currently use prepaid? What do they see as the benefits of prepaid? Payment Methods of those paying themselves (and not having it paid for them) are paying by cash 98% Food 83% Entertainment 97% Clothes 83% Utilities 96% Transportation 64% Education* I invest the extra money on land and gold after spending on our needs I put my savings in an envelope and lock it in my cabinet I like saving money through Arisan, because you will meet and interact with your neighbors and other people 93% Telecommunication 39% Rent* If we really need to borrow, we will borrow from another family whom is still related to us 1st 86% Medical The No. 1 ranked overall benefit of having a bank account is: * 29% do not spend on education and 60% do not spend on rent. The No. 1 ranked overall perceived benefit of a prepaid card is: Sometimes I m afraid I will get robbed while paying for my school fees in cash The No. 1 ranked overall important factors when choosing payment or saving method: Keeping money in a bank account is safer than keeping cash I would not have to carry cash around Convenient payment It would allow me to get money out of cash machines I could keep control of my spending Convenient withdrawal
Attitudes to Technology What are their attitudes to technology - usage and barriers - particularly when managing their money? 75% to a standard mobile phone 65% to a smart phone 38% to laptops 34% to PCs 29% to tablet type device Mobile banking Being able to pay bills online are not seen as key benefits for having a full bank account / prepaid card Main benefits to having a full bank account I could pay my bills 5 Not heard of mobile banking as an alternative to a full bank account 47% Heard of, not used 0% Currently using it I could buy products and services on-line I am worried if I lose my pin I can t use my ATM card Main benefits to having a prepaid card I could pay my bills I prefer going directly to a travel agent because I am afraid if I purchase online, I will get cheated I could buy products and services on-line
Education is Key While financial inclusion is clearly important, what are the main consumer benefits and how can they be made aware of them? What is the perceived cost of a prepaid? How can consumers increase control over their finances? How can the antifraud benefits be promoted? Lack of awareness about usage could be increased? Retailer acceptance is not yet fully understood. Looking from the barriers and advantages of prepaid, there is a clear need for education from governments, NGOs, retailers, and those looking to provide prepaid Advantages - Security Disadvantages The perceived main advantages of a prepaid card are seen as: Prepaid Bank The perceived main disadvantages of a prepaid card are seen as: I would not have to carry cash around 39% 2 I would have to pay money to own the card I could keep control of my spending It allows me to get money out of cash machines 3 15% 19% 13% 1 Not widely accepted at shops/ places I want to use it I would never be able to put enough money on the card I might lose my card Credible information sources for financial products and services. Overall, have used prepaid cards in the past whilst 84% have heard of them but not used them with 14% not having heard of them. Family/ relatives Bank officers 3 3 Heard of, but not used Have used in the past Never heard of
FUTURE OF PREPAID Looking to the future, prepaid cards have a real role to play in the drive for greater financial inclusion and money management. Greater financial inclusion and money management Rewards and voucher schemes could be built into prepaid cards Improve the service by introducing automatic balance updates at POS Features which are associated with prepaid card (% Top 2 Box). 63% Safe and secure 6 Buy products and services online 58% Convenient payment 57% Receive money/ Convenient withdrawal 56% Pay bills 55% Transfer money How relevant may a prepaid card be to them? How unique and different is a prepaid card? 30% somewhat relevant 7% very unique 3% very relevant 3 somewhat unique How likely are they to apply for a prepaid card? 15% somewhat likely very likely Why do I have to use it (prepaid card)? I only spend small amount money on my daily basis.. If it does not require PIN then if I loose the card somebody else can use it Although there is a maximum amount placed in the prepaid card, it encourages people to keep spending their money. It is not good for me