Banks Still Consider High Risks for eCommerce Transactions

Ilustrasi (dok)

JAKARTA (IndoTelko) - The prestige of eCommerce is currently skyrocketiing in Indonesia. Many startups or big conglomerate also entering this business along with the increasing adoption of the society in online shopping.

According to a research conducted by Brand & Marketing Institute (BMI) Research shoen that in 2014, the value of online shopping transactions Indonesia has reached Rp 21 trillion and is projected to reach Rp 50 trillion in 2015.

BMI Research noted that the average yearly online shopping expenditure of Indonesian people reached Rp 825,000 per person.

However beyond the lucrative potential, it turned out to be there are some business actors are still struggling with the payment issue. One of them is the problem with the Merchant Discount Rate (MDR) which is the fee charged by the Bank to the Merchant Acquiring (business owners) on each transaction through the EDC.

"The MDR issue is still a hot topic discussed for eCommerce players. MDR for eCommerce is higher than traditional retail. If the traditional retailers around 1.8%, it is 2% for eCommerce, "said Director & Country Manager of MasterCard Indonesia Irni Palar, recently.

Irni said that the MDR for businesses eCommerce higher than traditional retailers because in glasses banks are still at high risk. "Banks are accustomed to all measured risk and compliance. The eCommerce it's all completely virtual, so are considered more risky. MDR can not be removed, because the bank is considered an investment, " she said.

She explained that the impact of fairly high MDR is that transactions with electronic payment becomes lower in eCommerce. "Only 10% of the electronic payment which dominate the credit card. We continue to educate banks about eCommerce that MDR could fall into more attractive. You see, this involves a lot of Micro and Small Enterprises (SMEs), " she concluded.

Debit Card
Further, the use of debit card for eCommerce transactions is also not widely used although the it has been reaching 100 million users in Indonesia.

"Debit cards have not been widely used for eCommerce in Indonesia. There are security issues that made banks not encouraging the use of debit cards but allowing the use of credit card, " she said.

It is because in debit cards, costumer's money are deducted directly whenever a transaction occurs, which is different from the credit card system. In the credit card system, every transaction is using the bank's money first then it will be billed to the costumer.

"If there is fraud attempt, it can be directly sold customer accounts. If it is the bank's money, there are safety standards. But these issues can be overcome if the enhanced security standards is applied. We are now cooperating with a state's run bank, BNI, to create virtual number for debit card holders so the number is not exposed in public, " she explained.

Irni said that of the total eCommerce transactions, electronic payment by credit card in Indonesia is only 10%. Mostly the payment is relying onCash on Delivery (COD) which is approximately 70% and 20% of the transaction is done by transfer.

"If we can educate banks and customers to use debit cards, this can increase the value of eCommerce transactions," he concluded. (es)