Category: article

Indonesia’s “digital wallet” ecosystem and socio-technical change

Having to go back to my home country, Indonesia, twice in a span of a year have made me realize a significant change in many aspects of life here. Of course changes are expected when you left your country for more than a decade, so I already anticipated that. But one of the most vexing changes for me is this somewhat aggressive shift in the country towards the so-called “cashless society,” where you are made to use digital wallet services even though you do not really want to. Perhaps a couple of personal anecdotes will illustrate why I feel this way:

One time my family and I drove to a mall in Bandung, and this was during the first couple of weeks of our stay. When I tried to get into the paid parking lot (parking is rarely free in my country, especially at malls) I was struck with the sign: “No cash payment, [a digital wallet brand] only.” I asked the parking assistant about the sign and he confirmed it, I couldn’t pay with cash to park there. He told me that I could buy the digital wallet card from him though. I declined his offer and backed my car out of that mall because I did not want to use unfamiliar (at the time) transaction method and also felt that I was forced to use it.

This experience happened after I learned that there is no more cash payment option for toll roads. You have to use digital wallet service to pay for your toll fee, although in this case you have several options to choose. I am not sure if this is a nation-wide practice, but I assume it is. Later on, I also learned that at some malls when you buy food in their food courts you cannot pay with cash nor credit/debit card anymore. You can only use either a certain brand of digital wallet or the mall’s own service. I was annoyed that when I wanted to buy a bottle of water because my son was thirsty, I could not do it right away. I had to opt to use one of the services.

At this point, perhaps you might call me a whiner because digital wallet services are a convenient method for economic transaction. Or perhaps you might think that I am anti-progress because this turn to cashless society is Indonesia’s step towards realizing the so-called “Indonesia 4.0,” embracing economist Klaus Schwab’s conception of “Industrial Revolution 4.0.” However, I want to point out that there is a difference between forced “progress” and a participatory one. And I also think that Indonesians need to discuss socio-cultural implications of this aggressive shift towards cashless society from multiple perspectives, not just from the discourse of technopreneurship.

Even traditional food stalls such as this one are conditioned to employ digital wallet method for transaction

Here, I am reminded of the classic works by Langdon Winner and Neil Postman. Postman, in his book Technopoly: The Surrender of Culture to Technology, argued that any technological innovation never has one-sided effect, and that we have to simultaneously consider what new technologies can do and undo to society. Meanwhile, Winner in his seminal essay “Do Artifacts Have Politics?” explains the political nature of technologies in everyday settings and how the creation and operation of any technology require specific social arrangements. Winner’s most cited example, the height of bridges on the Long Island Expressway in New York, is the one that resonates with me the most in the case of Indonesia’s digital wallet ecosystem. Similar to Winner’s Long Island Expressway example, where its “master builder” Robert Moses deliberately designed the height of the bridges to discourage the presence of buses and consequently limiting access of racial minorities and low-income groups to Jones Beach, the adoption/enforcement of digital wallet services at some malls or toll roads in Indonesia is a case where technological architectures are being used as a method that constrains certain behavior (cash transaction) while encouraging another (digital wallet transaction).

Unlike the Long Island bridges though, it’s not racist ideology that motivates this “modality of constraint,” to borrow Lawrence Lessig’s term, but it’s market force. In my preliminary research, I learned that Indonesia is a huge untapped market for e-money market. According to one Google/GfK digital wallet study in 2018, despite the rapid growth of digital finance apps since 2010, only fewer than 40% of Indonesians with smartphones have used financial services apps. Even among the minority of e-money app users, only 11% are average daily users according to the same study. So it is understandable that these financial companies are being aggressive in making Indonesians use their service, even if it means forcing them through strategies such as the paid parking scheme that I experienced.

In my opinion, the aggressive strategies of some digital wallet services in Indonesia is somewhat an extension of what Silicon Valley giants like Google and Facebook have been doing to the internet ecosystem (in fact Facebook will soon join the digital wallet business with their cryptocurrency product, Libra). Some websites today limit how you sign up for their services. They only let you sign up either using Facebook or Google, with no other options (or a tiny-looking option that users often overlook). This strategy has now found its way out of the pure digital realm of the internet and into the daily lives of Indonesians. With the growth of digital wallet/e-money services and their strategies, I am guessing that many Indonesians will probably experience (or perhaps are already experiencing) a divided and sometime exclusive “merchant ecosystem,” where you can only use a certain type of service and not the others.

Of course for many Indonesians, this may be a good thing. Especially with various shopping discounts offered by these digital wallet companies these days. However, we need to also seriously consider how new technologies disentangle the structures of everyday life in the country. There are several lines of inquiry that I think we can consider. For instance, how the digital wallet ecosystem affects the role of malls as commercially-constructed public sphere in the country, or how digital literacy (or a lack thereof)—as related to age, class, and gender—influences the adoption of digital wallet services, or how data mining and tracking used in digital wallet services to build “a single customer view”—as one digital wallet service is planning to do—will shape the life of Indonesians in the future. These are the conversations that should also take place alongside the celebratory remark about cashless society.

My first peer-reviewed article is out

So finally my article is out! It’s published by SOJOURN: Journal of Social Issues in Southeast Asia. I’m quite happy with it. It’s my first peer-reviewed publication adventure (and I hope it’s not gonna be the last). It’s about an Indonesian MMORPG called Nusantara Online and I discuss it to propose what I call “playable nationalism,” one mode of expressing nationalism in digital forms. I know my discussion is not foolproof to criticism, especially since this is an early version of one of my dissertation chapters. But I hope with it being published I could get constructive criticism from its readers to be able to improve it. If you’re interested in reading it, it’s available as free download here. The other articles in the issue are also interesting, so if you have access to the journal from your academic institution you should check them out! (I know I will)

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