The Role of FinTech Digital Payments in Accelerating Development of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia: Empirical Evidence from Nusa Tenggara Barat and Bali

Abstraksi

Non-cash (cashless) payment is less favorable in Indonesia, about 90 percent of transactions in Indonesia still rely on cash. The dominance of cash transaction leads to several drawbacks, including to MSMEs, particularly inefficiency and less secure. The emergence of Financial Technology (FinTech) especially those focusing on digital payment such as Gopay, TCash, ECash, OVO, etc. may provide better payment transaction for MSMEs. Therefore, this study aims to investigate the accessibility of digital payment services toward MSMEs as well as to measure the impact of electronic payment/wallet services on MSMEs development. In order to achieve those goals, this study utilizes descriptive statistics as the methodology by analyzing primary data obtained from 50 respondents from two provinces namely Nusa Tenggara Barat (NTB) and Bali. In addition, the study also elaborates qualitative data obtained through focus group discussion (FGD), and in-depth interview with several stakeholders such as Digital Payment Fintechs, BI, OJK, Kemenkominfo, and etc. The study found that innovation in payment through digital payment provided by Fintech is proven to boost development of MSMEs by enhancing efficiency (faster transaction, less costly, well-managed report, and borderless) and security. Furthermore, the findings from NTB shown that Fintech services is able to reach not only those who have smartphone, highly educated, have internet connection, and aware of technology. The case of Mandiri E-Cash in NTB that provides e-wallet and digital payment for Farmers through USSD (*141*6#) has shown that to make a payment transaction only requires usual mobile phone with SMS and 2G signal.