Banking on Fintech: what does it take for micro merchants to adopt them?

Abstraksi

Financial technology, or fintech, has been identified as holding the potential to accelerate financial inclusion, including for the 57 million unbanked micro enterprises in Indonesia.Using Human Centered Design, a qualitative method through which researchers empathize with respondents to understand their needs, desires, pain points and experience, Pulse Lab Jakarta examined how over 100 micro-merchants in five districts in Java transitioned into early adopters of fintech, particularly mobile savings account, peer to peer lending, and digital payments. We identified their fintech adoption journey, including the enabling factors and their emotional experience, as well as their habits in managing their business and finances. Through our research, we identified the enabling factors that help onboarding the micro enterprises to fintech services: trust (when fintech services are introduced to them by agents who are trusted peers), appropriate (through use cases that meet their needs, such as saving in small amounts), accessible (available outside of business hours in their neighbourhood), and perception of affordability. However, we also found issues that remain a challenge for fintech use in this cohort. Firstly, micro-merchants trust their peers more than any service provider, enough to share passwords with their agents. Aside from creating a security risk, this also shows that regulators’ idea of privacy and security are not shared by micro-merchants. Secondly, although they rely on their agents for information, fintech agents are not necessarily more knowledgeable than their customers. Despite of successful adoption, more strategies are needed to promote active usage of fintech services.