OVO and DANA Potential to Merge will Increase if Alibaba Injects Grab

The Chinese e-commerce giant, Alibaba Group Holding, is reportedly in talks with Grab regarding investment of US$ 3 billion or around IDR 44.5 trillion. If this happens, the potential for OVO and DANA to merge is considered to be even greater. A payment technology (fintech) startup, OVO, is supported by Grab.

Meanwhile, Alibaba’s financial business units, Ant Financial and Emtek Group, have shares in DANA. Chairman of the Indonesian Venture Capital Association (Amvesindo) Jefri R Sirait assessed that the merger is a corporate action that allows big players to do so.

It also aims to strengthen the ecosystem. “Certainly the merger will be carried out with a well-prepared strategy,” Jefri said, Monday (28/9).

Previously, the boss of a Singapore-based venture builder company, Momentum Works Li Jianggan said the same thing. “More talks like that (merger) may follow (amidst Alibaba and Grab discussions),” he was quoted as saying by ChannelNewsAsia, last week (23/9).

However, OVO and DANA are reluctant to comment on the potential for an increased merger if Alibaba injects funds into Grab. Actually, the news about OVO and DANA about the merger has been blowing since last year. Mochtar Riady, founder and owner of Lippo Group, said that his company sold two-thirds of OVO’s shares.

Grab Reportedly Will Buy DANA

At the end of last year, Grab was reportedly in talks to buy DANA from Emtek. A Reuters source said the decacorn from Singapore plans to merge OVO with DANA. This is to fight the dominance of GoPay made by Gojek.

Based on iPrice and App Annie’s research, GoPay and OVO are still leading the fintech payments market in Indonesia in the second quarter. Previously, the CEO of BRI Ventures Nicko Widjaja considered that Indonesia’s fintech ecosystem was more like China than Silicon Valley, United States.

“Reflecting from there (China), it makes perfect sense if Indonesian payment fintech players, which control a smaller market share, choose to work with strategic partners,” he saidlast June (16/6).

In the Bamboo Curtain country, there are only two big paying fintech players, WeChat Pay and Alipay. So, according to him, the news that OVO and DANA agreed on a merger to compete with GoPay, it is very possible. After all, the merger will strengthen the ecosystem in the fintech industry.

“Reflecting on the Indonesian market specifically, the key to the success of the fintech industry is collaboration,” said Nicko. This is because the fintech payment sector ecosystem is large. The services available also vary, ranging from payment gateway functions, card switching, and others, which are end to end in nature.

In Indonesia, ShopeePay has also emerged as a tough competitor for OVO, DANA, and GoPay. Based on Snapcart and MarkPlus, this Shopee-affiliated fintech led the way in terms of the number of users and transactions during the corona pandemic.

Previously, a UK-based Startup Expanded to Indonesia through OVO and DOKU

UK-based payment platform PPRO announces its expansion steps in Indonesia. They entered the Indonesian market by integrating the Doku and Ovo e-commerce payment methods. PPRO claims to offer the simplest and most efficient payment access in the Indonesian e-commerce market.

This marks a significant milestone in PPRO’s expansion across Asia Pacific. According to a recent report, the e-commerce market in Indonesia will grow 50% in 2020, with many consumers using online shops for the first time this year due to the pandemic.

The integration carried out by PPRO will enable international payment customers and online merchants to increase their income from Indonesian consumers. Given, the combined reach of Doku and Ovo is very large domestically.

Doku and Ovo are each considered to be one of the top e-wallet apps in Indonesia. To support the diversity of payment preferences in Indonesia, this integration will offer four types of payment services, namely electronic wallets (e-wallets), internet banking, bank transfers, and cash for consumers who prefer to pay at ATMs and convenience stores.