Bandung, IndonesiaSentinel.com — The use of debit cards, once a dominant payment method, has declined significantly as consumer payment preferences shifting into digital payment systems. Recent analysis shows the number of debit or ATM card transactions in Indonesia dropping 9.57% year-on-year (YoY), amounting to 584 million transactions. Convenience is one of the significant factors leading consumers increasingly turning to digital payment platforms.
Bank Indonesia (BI) Governor Perry Warjiyo highlighted this trend during a press conference following the central bank’s monthly board meeting in August 2024. Warjiyo noted that digital payment transactions through the Quick Response Code Indonesian Standard (QRIS) experienced a staggering 207.5% growth YoY. The number of users reached 51.43 million, while the number of registered merchants hit 33.2 million.
“This reflects the public’s growing acceptance and preference for digital payment systems,” Warjiyo said during the briefing on Wednesday, August 21, 2024.
Surge in Digital Payment Methods
While debit card usage is on the decline, other forms of digital payments are seeing a significant uptick. Credit card transactions grew by 15.3% YoY, reaching 39.8 million transactions. Additionally, Bank Indonesia’s Real-Time Gross Settlement (RTGS) system saw a 15.46% YoY increase, processing a staggering IDR 15,450 trillion in transactions.
The growth of BI Fast, a system designed to facilitate instant transfers, was also notable, with transactions surging 65.08% YoY to 301.4 million. Digital banking services, too, saw an impressive rise, with 1.845 billion transactions recorded, marking a 30.5% YoY growth. Electronic money transactions followed suit, growing by 22.46% YoY to 1.272 billion transactions.
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Why Debit Cards Are Falling Out
The decline in debit card usage reflects a broader trend of digital disruption in the financial services sector. Consumers, especially younger generations, are favoring digital payment methods for several key reasons:
Convenience: Digital wallets like GoPay, OVO, and DANA offer a seamless payment experience. Users can make transactions directly from their smartphones without the need to carry physical cards.
Speed: Contactless and QR code-based payments, such as those facilitated by QRIS, allow for instant transactions, reducing the time spent at checkout.
Security: Digital payment platforms often come with enhanced security features, including encryption and multi-factor authentication, providing users with more confidence in the safety of their transactions.
Rewards and Incentives: Many digital payment providers offer cashback, discounts, and other promotional incentives, making them more attractive than traditional debit cards.
As digital payment systems continue to evolve, consumers in Indonesia are increasingly prioritizing speed, convenience, and security—factors that are driving the country’s rapid transition away from debit cards and toward a more digital financial ecosystem.
(Raidi/Agung)
