In recent years, Indonesia has shown significant growth in the financial technology sector. Widespread digitalization, a growing interest in innovation, and the rapid increase in users of financial services all positively impact the country’s economy — stimulating business development, improving financial accessibility, and attracting investment into the digital sector. In this article, we provide a brief overview of the fintech market, outline licensing regulations for companies, and discuss current restrictions for foreign investors. This material will be useful for foreign companies considering doing business in Indonesia's fintech industry.
Indonesia’s fintech ecosystem includes hundreds of companies offering services such as lending, digital insurance, e-payments, investment platforms, and blockchain technologies. Some of the largest players include:
1. GoTo Financial (Gojek & Tokopedia) — originally launched as a ride-hailing service, Gojek quickly expanded into a multi-service platform that includes GoPay, one of the country’s most popular e-wallets.
2. OVO — another widely-used mobile payment and financial service provider, known for partnerships with major retailers and banks.
3. Dana — a strong competitor to OVO and GoPay, this platform focuses on e-commerce integration and offers solutions for unbanked users.
4. LinkAja — aims to consolidate payment services across several banks, including state-owned ones. It primarily focuses on everyday expenses like utilities and transport.
5. Kredivo and Akulaku — offer credit-related services such as installment payments and microloans. Kredivo specializes in BNPL (Buy Now, Pay Later) solutions for online shopping, while Akulaku operates both online and offline, offering a wider range of financial products including prepaid cards and small loans.
With smartphone penetration above 70% and increasing internet usage, Indonesia’s fintech sector has promising growth potential. The number of digital financial service users is expected to continue rising, along with a broader range of financial products. The government is actively supporting digital transformation.
Notable developments include:
✓ Growth in the digital economy and internet usage — As of 2023, Indonesia ranked fourth globally (after China, India, and the US) in number of internet users, creating massive potential for fintech adoption and growth.
✓ Advancements in AI and machine learning — used to improve security, detect fraud, and enhance overall service delivery.
✓ Expansion of blockchain and cryptocurrency — these technologies are actively being developed and may become an integral part of the national financial system. Read more about cryptocurrency in Indonesia in this article.
✓ Increase in startups and investment — fintech startups are booming, attracting millions in funding from international investors and forming collaborations with major corporations and government agencies.
The Indonesian financial sector is strictly regulated. To operate in the fintech space, businesses must obtain proper licenses. The two main regulatory bodies are:
• Bank Indonesia (BI) — responsible for licensing e-payment systems, crypto exchanges, and digital wallets.
• Financial Services Authority (OJK) — regulates fintech lenders, insurance platforms, and investment platforms.
1. Payment System License (from BI) — required for e-wallets, money transfer systems, and payment gateways.
2. Lending and Investment Platform License (from OJK) — for online lenders, P2P platforms, and fintech brokers.
3. InsurTech License — for offering digital insurance services.
4. Crowdfunding License — for platforms operating on a collective investment model.
The licensing process typically involves several steps: company registration, document submission to regulators, security and legal compliance checks, and sandbox testing. After successful review, the company is issued a license.
Foreign companies planning to enter the Indonesian fintech market should be aware of the following limitations:
1. Foreign ownership caps — foreign investors are typically limited to a 49% stake in fintech companies.
2. Local partnership requirements — foreign businesses must partner with local companies or banks to operate legally in the sector.
3. Licensing only via local entities — foreign companies can only obtain fintech licenses through partnerships with registered Indonesian legal entities.
These rules are designed to protect local businesses from domination by global corporations but can pose entry barriers for international investors.
To comply with all legal requirements, foreign investors are strongly encouraged to work with legal advisors and local partners.
If you’re considering starting a business in Bali or elsewhere in Indonesia — or if you need professional guidance and support — our consulting firm, Good Luck Group, is here to help you enter this fast-growing market successfully.
