China-Indonesia cross-border payment pact between PayEase and Doku

• Partnership to boost China–Indonesia e-commerce
• Doku to facilitate China UnionPay payments in Indonesia

INDONESIAN payment services pioneer PT Nusa Satu Inti Artha (Doku) has partnered with China-based payment gateway PayEase, saying that this would enable cross-border transactions between the two countries.
 
PayEase is China’s first payment service provider, established by the Government in 1998, and is now in alliance with 23 major banks in China – or 90% of the banking industry in that country.
 
With the partnership, merchants connected with Doku in Indonesia will be able to accept China UnionPay payments from Chinese customers, making it the first non-bank in the republic to provide such a service.

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Doku chief operating officer Nabilah Alsagoff said that while e-commerce can give small and medium enterprises (SMEs) global reach, this promise would not be fulfilled if the payment ecosystem does not support cross-border transactions.
 
“We want to expand the country’s cross-border e-commerce by allowing safe, reliable, and simpler cross-border transactions,” she told Digital News Asia (DNA) on the sidelines of the partnership signing ceremony in Bali.
 
“Payments and logistics are the backbone of e-commerce, but also the most challenging parts – we want to do our part in making the payment environment better for e-commerce in this country to grow further,” she declared.
 
Nabilah said that this was a good time for Doku and PayEase to establish their partnership as the e-commerce sector in both countries is booming, and demand for Indonesian-made products are high in China.
 
“We want to make sure that no matter what type of payment is used by our customers, we have the ability to process it,” she added.
 
In Indonesia, Doku provides electronic payment options for merchants and e-commerce consumers, and holds an e-money licence issued by Indonesian’s Central Bank in 2012.
 
It is in partnership with 11 banks in Indonesia, has 22,000 merchants on board, and has processed Rp8.5 billion (US$647 million) worth of transactions by the end of last year, according to the company.
 
Doku merchants interested in enabling China UnionPay payment just have to reach out to Doku and ask the payment service provider to turn on the service for them, according to Nabilah.
 
The partnership also allows Doku merchants to market their products and services on PayEase’s own e-commerce platforms: Silkroad Trade Ease and TravelEase.
 
Penetrating the Indonesian market
 
For PayEase, the partnership sets the path for its expansion into Indonesia, according to its executive vice president Kevin Yim.
 
“Our strategy in entering new markets is always by building partnerships with leading local companies which know their own market very well,” he told DNA.
 
PayEase recently partnered with Korean payment provider KG Incis to allow cross-border transactions between China and South Korea.
 
“We want to make sure that merchants … in Asia can expand and reach global customers without having to worry about the payment ecosystem,” Yim said.
 
In February 2015, PayEase was acquired by Austin-based cloud platform mobile payment provider Mozido Inc, founded by serial entrepreneur Michael Liberty.
 
Mozido’s acquisition of PayEase also enables cross-border transactions between China and the United States through the MozidoPayEase platform.
 
Push for exports
 
The end-game for Doku and PayEase is to make the payment ecosystem the catalyst for SMEs to export their products.
 
While Indonesia is encouraging its SMEs to think globally, many are facing challenges, according to Doku’s Nabilah.
 
These challenges revolve around their technology capabilities, production capacity, and also having bank accounts that can receive money transferred from overseas.
 
She said that while e-commerce is rising in Indonesia, more than half of all transactions are still carried via cash-on-delivery.
 
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