Payment Gateway in Indonesia: Meaning, Benefits, Examples

A payment gateway is a system that lets online businesses accept payments from customers through a range of methods, such as credit cards, debit cards, e-wallets and bank transfers. A payment gateway acts as the go-between for the seller, the buyer, and the bank or financial institution involved in the transaction.

Benefits of a Payment Gateway for Online Businesses

A payment gateway offers online businesses several benefits, including:

• Wider market reach. With a payment gateway, an online business can reach customers from different regions or countries who have different payment preferences. A payment gateway can adapt to local currencies, languages and regulations.
• Higher sales conversion. With a payment gateway, paying becomes faster, easier and more comfortable for customers. A payment gateway can reduce the risk of canceled orders or losses from fraud or chargebacks.
• Savings in cost and time. With a payment gateway, an online business does not have to handle the technical and administrative side of online payments itself. A payment gateway can provide transaction reports, reconciliation, integration with other platforms and customer support.
• Stronger transaction security. With a payment gateway, customers' payment data is protected by SSL (Secure Socket Layer) encryption and advanced fraud detection systems. A payment gateway must also comply with the security standards set by Bank Indonesia (the central bank) or other relevant institutions.

How a Payment Gateway Works

In general, a payment gateway works as follows:

• The customer chooses the product or service to buy on the online business's website or app and enters the required payment details.
• The website or app sends the payment details to the payment gateway through SSL (Secure Socket Layer) encryption.
• The payment gateway passes the payment details on to the bank or financial institution that issued the credit card or the other payment method the customer chose.
• The bank or financial institution verifies and authorizes the payment details and sends a response to the payment gateway.
• The payment gateway passes the response to the online business's website or app, which then shows the result to the customer.
• If the transaction succeeds, the payment gateway sends the funds from the bank or financial institution's account to the online business's bank account on the agreed schedule.

Examples of Payment Gateways in Indonesia

Indonesia has many payment gateways that online businesses can use. Here are some examples, along with their standout features:

Midtrans

Midtrans is a complete payment gateway solution designed for businesses in Indonesia. It accepts a wide variety of payments, including credit or debit cards, BCA Klikpay, CIMB Clicks, XL Tunai, Mandiri Clickpay, T-Cash and manual bank transfers. Midtrans also offers features such as:

• Snap: a responsive payment page that can be customized to the online business's branding
• Iris: an automated service for sending funds to business partners or third parties
• VT-Direct: direct integration with the Midtrans API to raise sales conversion
• VT-Web: Midtrans's built-in payment page, with no API integration needed
• VT-Link: a payment link that can be shared by email, SMS or social media
• VT-Notify: transaction status notifications by email or SMS

DOKU

DOKU is a payment technology company and a pioneer of payment gateways in Indonesia. DOKU offers a range of payment solutions to fit the needs of online businesses, such as:

• DOKU Wallet: an electronic wallet that can be used for many online and offline transactions
• DOKU MyShortCart: an e-commerce plugin that integrates with platforms such as WordPress, Magento and Shopify
• DOKU Direct API: an API integration that lets an online business set up its own payment page
• DOKU Virtual Account: a virtual account number that can be used to receive payments from many banks
• DOKU Alfamart: a cash payment method through the Alfamart convenience store network across Indonesia

Finpay

Finpay is a payment gateway developed by PT Finnet Indonesia, a company in the information and communication technology sector. Finpay provides payment solutions for many industries, such as banking, e-commerce and government. Some of the payment solutions Finpay offers are:

• Finpay Link: a payment link that can be shared by email, SMS or social media
• Finpay QRIS: a QR code, based on Indonesia's standardized QRIS system, that can receive payments from many payment apps
• Finpay EDC: an EDC (Electronic Data Capture) machine that can accept credit or debit card payments
• Finpay Web Payment: an online payment page that can be customized to the online business's branding
• Finpay Mobile Payment: a mobile payment app that can be used for many online and offline transactions

Stripe

Stripe is a global payment gateway that supports more than 135 currencies and a range of payment methods, such as credit or debit cards, Apple Pay, Google Pay, Alipay and WeChat Pay. Stripe also offers advanced features such as:

• Stripe Checkout: a responsive payment page optimized for sales conversion
• Stripe Billing: a recurring billing service for subscription or usage-based businesses
• Stripe Connect: a payment platform for marketplace or platform businesses
• Stripe Radar: a fraud detection system that uses machine learning and Stripe's global network data
• Stripe Sigma: a transaction analytics and reporting service that uses SQL

OCBC NISP

OCBC NISP is one of the largest private banks in Indonesia, and it also provides a payment gateway service for online businesses. The OCBC NISP payment gateway offers easy integration, transaction security and customer support. Some standout features of the OCBC NISP payment gateway are:

• OCBC NISP Virtual Account: a virtual account number that can be used to receive payments from many banks
• OCBC NISP QRIS: a QR code that can receive payments from many payment apps
• OCBC NISP Credit Card: a credit or debit card payment method with installment plan and pay later features
• OCBC NISP ONe Mobile: a mobile banking app that can be used for many online and offline transactions