Despite these significant improvements, the access and use of digital payments, including digital wage payments tend to be unevenly distributed within the country. Among the working-age population, 46 per cent of men and 51 per cent of women had an account at a formal financial institution or mobile money service in 2017, while 25 per cent of wage earners received wages into an account.
Among digital wage earners, 40 per cent opened their first account to receive wages. While many large enterprises, in particular those located in peri-urban and urban areas, have already transitioned to digital wage payments, medium-sized and small enterprises, which represent the vast majority of enterprises and employees, have been slower in embarking on the wage digitization journey.
The Global Centre in collaboration with the ILO Country Office for Indonesia and Timor-Leste initiated a rapid assessment to study the prospects for responsible digital wage payments in Indonesia, notably in SMEs engaged in the garment and retail trade sectors.
The assessment included interviews with representatives of government institutions, workers’ and employers’ organizations, enterprise owners and managers, (digital) financial service providers and their industry associations, development partners, and other relevant stakeholders; as well as in-depth interviews with 20 enterprises and 100 women and men workers. The assessment identified the costs, benefits, risks, opportunities, and distributional implications of the transition for enterprises, their workers, government institutions, payment service providers and other financial service providers. It sought to establish a baseline and generate actionable insights to facilitate the transition.
Teguh Dartanto, Dean of the Faculty of Economy and Business of University of Indonesia, Valerie Breda, Global Centre on Digital Wages for Decent Work and Michiko Miyamoto, ILO Country Director for Indonesia and Timor-Leste
Jahen F. Rezki, Researcher of Institute for Economic and Social Research – Faculty of Economics and Business, University of Indonesia (LPEM FB UI)
Onny Widjanarko, Executive Director of DKI Jakarta Province Bank Indonesia Representative Office
Prof. Drs. Anwar Sanusi, MPA, Ph.D, Secretary General of the Ministry of Manpower
Aloysius Budi Santoso, Deputy Chair for Employment of the Indonesian Employers' Association (Apindo)
Elly R. Silaban, President of the Confederation of All Indonesian Trade Union (KSBSI)
Isvary Sivalingam, Better Than Cash Alliance
Tendy Gunawan, ILO's programme officer