GET Program - Portfolio of Evidence

Fatimah Azzahra - 20240010029

M. Haqsya Zulfansyah - 20240010044

Rafif Rizqi Ramadhan - 20240010058

Rizki Maldini Dony Damaragi - 20240010064

Sutan Arkin Alexander - 20240010077

Jakarta
2021
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 Preface
This report presents as the evidence of the results of our research about the digital economy,
especially in Indonesia. As the world moves further into the digital age, we hope our report
can encourage all Indonesian to reach and gain more value from the new economic era.

In this portfolio, we would like to define the features of the digital economy from its
inception to the latest digital and its transformation. We proposed this subject to create
knowledge among the Indonesian society about how important and how big the impact of
digital financial use in the economy changes and how can we scale up and improve our
economic growth faster. And furtherly we will explain more specifically about financial
technology (FINTECH) since there are so many Indonesian who are not paying attention to
this new technology.

By discussing the digital economy we might find a lot of definitions or meanings that it has
enormous power. It has transformed much into a digitized economic activity since the
industrial economy has discovered innovation and development. It means that many
companies are willing to know how the digital economy can help to maximize their economic
activity by obtaining all the data and turning the data into innovation. The company can also
make a change from having all the data for the consumer, the product and for the company
itself

Toward this report, we convinced that a company must give attention about what customer
needs and wants so that the business can continue to grow, gain a big market, and make much
profit. In addition, we hope our report will bring a positive impact that can help explain some
of the perspectives of Indonesian customer behaviours in financial technology finding the
aswer about how customers do not trust the financial technology, and how a company can
handle the trust issues, also how can they grow faster and sustain the business activities
during the pandemic.

At the last word, we would like to express our sincere appreciation to Ms. Xenia A.
Wijayanto, S. H., M. Si. for guiding us in this project from the beginning of our digital
economy program.

Group 4 Alibaba,
Jakarta, 15th October 2021

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Chapter 1
The Digital Economy of Indonesia
1.1Preliminary
Digital Economy is any various of economic activities that their functions are basically using
the information and communication technology. We are also can define it succinctly as an
economic based on digital technology. The digital activity is not just happened in financial
technology sector but also worked in all kinds of business industry such as manufacturing
industry, personal and business services, health sector industry, etc. This digital technology
creates the new way of people making their behaviour and drives people to create benefit and
efficiencies

As time goes on the internet becomes more known and used by most Indonesian. As
we have mentioned before Indonesia has 196.714.070,3 Internet users, which means most
people already have access to technology. Many businesses in Indonesia already have access
to the digital and internet to help them gather data information and develop the data into
something innovative and helpful for the company to do their activities and the consumers
when they use the company’s service or product. Nowadays, people tend to use the internet
and digital to help them do activities, and this helps people to be more effective, productive,
and efficient. The development of digital technology and internet use in Indonesia is fast, this
created new opportunities for businesses to reach their consumers in the marketplace.

Modern digital technology and the internet ease people to do their activities at the
same time or multitasking, from delivering something to someone, ordering something,
uploading and downloading, search information include pictures with AI (Artificial
Intelligence) features, communicating, and other things. As we can see, digital technology
has a big impact in this era.

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Fintech In Indonesia
1.2Digital Life to Fintech
Since the digital era began, there are many people use any digitized technology in transacting
because it is easy and more practical without the need to come to an ATM or bank.
Especially during a pandemic. All activities are limited so that more people carry out
activities at home and digitized everything. This condition also has a massive impact on
businesses in Indonesia, and we need to survive our businesses by maximizing the use of
digital to overcome challenges during this pandemic. Now there are many conveniences in
the digital era, such as in transacting, we can do it via cell-phones or devices that we have.

From the impact of the pandemic, many people start to shop or do transact business digitally
much more than before. So that they require digitized transfer services for the payment.
Using an interbank transfer is an efficient and easy way, but the problem is the more you do
interbank transfer the more they will pay for the bank administration fee. And commonly it
charges at least IDR6500 for each transaction. Unfortunately, If we make transfers between
banks intensively, the number of transfer fees will cost much and can reach millions when
added up in a matter of months or even years.

The transfer feature is a part of bank service activity that comes into one's vision right as
moving prescribed fund by the mandate giver intended to benefit a person designated as the
recipient. This bank activity had existed for a long time before the internet appeared. The
transfer process was still using the conventional method, people were sending money by the
post office. But along with the development of innovative technology and then an ATM
(Automated Teller Machine) appeared to help the process of all financial transactions more
quickly, practice, and well-integrated. ATM was first introduced in Indonesia in 1987 and
based on the data ATM is still widely used until now.

In the current digital era, most of the money transaction activity is using technology. In
general, they named it financial technology. The most common financial technology that
people know of is Internet Banking and Mobile Banking. The technology of the Internet &
Mobile Banking can be used easily and practically, it is because of the emergence of financial
applications. The presence of internet banking offers convenience in how to transfer money
through websites or applications. This service can be used anytime and anywhere as long as it
is connected to the internet.

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Nowadays, mobile banking is being used in almost every bank company because it helps
their customer to do transfer simpler and faster. Since its technology developed, there are
other provider which can make an application that are not issued from banks but still
partnering with banks. And generally, those interbank money transfer applications are
providing the advantages of no administration fees. And this is such an opportunity for
people who currently like to do regular transactions. A free admin charge of transfer is quite
profitable for the transferor because they do not get a transfer fee deduction, so this method is
efficient and better to use if you want to transfer from a different bank.

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Fip.id
1.3The History of Flip.id
Flip.id is a digital financial service from Depok, Indonesia. Flip.id is a pioneer in providing
free interbank transfer services. Founded by Rafi Putra Arriyan, Luqman Sungkar, and
Ginanjar Ibnu Solihin in 2015 and the idea of the Flip was founded when they were a student
at the Faculty of Computer Science, University of Indonesia. Currently, the free interbank
transfer service from Flip.id can be accessed from all devices; computers via a website,
mobile browser, or any kind of smartphone operating system through android and iOS.

The idea for Flip.id discovered from Mr. Rafi Putra Arriyan's problem, He often experienced
borrowing a small amount of money from his friends while studying at the University. As a
student, Mr. Rafi usually did not have some cash in his pocket. So, when he want to buy
some lunch or dinner he usually asked Mr. Luqman to pay his bill cash and would pay the bill
later. Then when he wanted to return his debt via transfer, there was an admin fee for each
transaction because they both did not have the same bank account. The admin fee for
interbank transfer was IDR6500,- and it was a meant number for Mr. Rafi as a student.

To find out the solution, Mr. Rafi looked for friends who have the same bank account as
Luqman's so that he would not pay for the admin fee. But then, he found another problem. He
realized that he could not always rely on his friends because friends were not always
responsive. From there, Mr. Rafi and Mr. Luqman came up with the idea to create a platform
serving a free interbank transfer service that was reliable, responsive, and also well received.

In the first year around 2015 - 2016, Flip.id was only interested by university students. But
Flip.id had received and managed a total IDR 60million transactions each day. This
unexpected progress encourages the founders; Mr. Rafi, Mr. Luqman, and Mr. Anjar to make
development and optimization for the platform and also improve the security system for
users. In 2016, Flip.id got its official permission from Bank Indonesia and was the first
interbank transfer platform that had a license from Bank Indonesia.

Since that time, Flip.id now has collaborated with 14 banks in Indonesia and reached more
than IDR 300million transactions each day from millions of users with a total value of
trillions rupiah per month. From a simple google form platform, Flip.id now can be accessed
with a mobile application. Other than that, all Flip.id activities as a financial technology
platform have been monitored and licensed by Bank Indonesia.

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Flip.id transactions did not just come from individual users but also spread throughout
Indonesia and corporate users such as Tiket.com, Grab.id, Ruangguru.com, and
Kitabisa.com. Flip.id finally launched Big Flip to answer the needs of business people. While
the regular service of Flip.id focuses more on helping individuals transfer for personal needs,
Big Flip focuses more on helping businesses to carry out financial operations such as payroll,
any payments to their business partners, or refunds to their customers. Flip.id also innovated
their feature by providing internet data packages and phone credit for any kind of provider. It
came with a very competitive pricing strategy that suites for many people.

It has been 6years since the first version of Flip.id was released, and Flip.id always runs from
one achievement to another achievement continuously. Flip.id now has become one of the
most widely used interbank transfer applications.

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Fip.id
1.4 The Interview with product managaer Flip.id

1. What is Flip's vision, mission & goals?

The vision is to be the fairest company in the world and one of their goals is Flip
aimed to become one of Indonesia's Bank companies and until now Flip and the
whole team are trying to build and manage a fair company. For example, Flip wants
users to feel that they are not only benefited from Flip company but also get some
good reciprocity.

2. What are the toughest obstacles that Flip had experienced and how have they
impacted Flip's business?
In the first year of Flip, the Flip system was forced to stop running by Bank Indonesia
because Flip had not asked for permission to manage a fund transfer transaction. At
that time, Bank Indonesia then asked Flip to immediately complete various
requirements to obtain official permission so that the Flip system could be reactivated
and be worked as normal as before. This obstacle was very urgent & important
because if Flip did not get permission or if all the reports were rejected by Bank
Indonesia Flip would not exist until now or the Flip company will be closed
permanently. But after the Flip team's hard work it was all paid off. Flip completed all
the requirements long before the deadline.

3. Flip has a wide range of products such as regular Flip, Big Flip, Flip Globe,
Telephone Credit, and Electricity tokens purchase services. Then which
product/service contributes the most to the Flip business?
If the most contribution you meant is which business is the most downloaded and
used by users, I definitely will say the Regular Flip. The regular Flip feature is an
inter-bank transfer that currently has the widest users, with more than 5,000,000 users
in Indonesia compared to others.

4. How does Flip make a profit while the services provided are free?
Flip has many other lines of business, but there is one line of business that generates
enough big revenue for Flip. We named it Big Flip. It is a service specifically for B2B
that provides the company to transfer their employee salaries with a tax of Rp. 4,500
for each transaction. Other than that, the thing that contributes quite a lot to Flip's
business is our investors. Flip has received funding several times from investors with
a sizeable value. With the fundings, Flip could hire some world-class engineers, and
then Flip could make good progress without compromising Flip's main business.

5. What distinguishes Flip from other fintech companies that also provide the same
service?
If we compared Flip with other providers such as Oy!, we would not find the
difference between the two directly because the service is absolutely the same. But, if
we looked closer and noticed it, the difference between Flip and its competitors is Flip
had so many loyal customers, we have good customer relationship on our social
media account so that Flip users will feel comfortable when using Flip application
even if our service could not provide a real-time transaction yet. But with our loyal
customer, Bank Indonesia ever released that Flip is the most widely used inter-bank
transfer in Indonesia.

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6. What business sectors collaboration Flip has the most?
In order to help the transaction process in the Flip application, Flip is currently only
focusing on collaborating with banks.

7. What resources are most needed to provide the best service for Flip users?
It might be a lot but Flip focuses on funding and developing people, They both are
very important to run a good ecosystem in Flip. But the funding would come the first
one because it is really common in a business start-up when the start-up aimed to
achieve a milestone they will need some funding to reach their milestones optimally.

8. How many transactions does the flip make in a day?

This is a confidential thing, but I will give you the range. Flip reached around 350 to
500 thousand transactions a day.

9. With this number of transactions, are there any significant problems faced by Flip that
have not been resolved?
Flip does 350 to 500 thousand transactions in a day and until now flip does not use
(VA) and still uses a unique code for each transaction so sometimes there is a mistake
that happens so people will ask to refund their money. But until now, 20% of refunds
on Flip are still processed manually so that made overtime work for our operational
team.

10. How does Flip survive these pandemic times?

Because the base of Flip business is fully digital, so Flip did not get the negative
effect during the Covid-19 pandemic. Instead of getting a negative effect, the
pandemic gives Flip a positive effect because Flip gained so many users during the
pandemic. Why? During the pandemic, people can not go outside to make
transactions at the bank or ATM, so people will look for another alternative and Flip
is one of the best alternatives for this situation. They can make any transaction in their
hand and it is free of the admin fee.

11. What kind of marketing has been the most effective way to introduce Flip to the
public?
In the first time when Flip was founded in 2015 and in its first 2 years, Flip gain its
market by focusing on social media marketing especially Facebook. There are so
many users who know the Flip application from a Facebook group from mouth to
mouth, we also gain our customers through Instagram and google ads.

In the middle of 2018-2019, the Flip company realized that Facebook had been stuck.
We noticed that the conversion between what Flip pays for the ads and the number of
new users who are willing to register Flip apps was much different, not as good as
before. After that, Flip found another way to gain the market by starting to explore an
advertisement using banners and putting ads on the train.

During this year, around 2020-2021, Flip is more focusing gain the market by making
advertisements on TV or YouTube, and also following social media trends by using
content marketing on TikTok. So 85% of Flip marketing activities are using digital
marketing.

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12. What strategy does Flip have in the future when something unpredictable happens?
If something unpredictable that you meant is Flip's users decreasing time by time. I
would answer that will be impossible. Because Flip counts the number of users as the
user who has ever made a transaction in Flip. But it would be possible if "our loyal
customers" can be decreased slowly. That is a general problem that might be
happened in a start-up business and it can be solved as simply as the company started
to find the reason why the customer stops using the app after that the company will do
research to solve the problem.

But, if something unpredictable that you meant is "there might be a

possibility of Banks in Indonesia will provide the same feature; free inter-bank
transfer". My answer is yes. Yes, Banks will definitely try to provide a free inter-bank
transfer at least in 2022. All Banks in Indonesia now are trying to create an integrated
system that can provide a free inter-bank transfer.

And you might be right, that will affect Flip's main business. But Flip has so many
businesses not only the regular one but there are also Big Flip, Telephone Credit
purchasing, and etc. So, one of the things that Flip can do to deal with that significant
condition is to increase and release other vertical businesses.

13. What value proposition does Flip give to their users besides free inter-bank transfers?
As I mentioned above, the Flip application is not only for free transfers, but now the
service has expanded to be able to send money abroad and also top up e-wallet
balances. esides that, it can also be used to purchase credit and data packages, to top
up digital wallet balances, and even to top up electricity tokens. All of those features
are provided in just one mobile app.

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Journal of The Process

1. The video of Presentation

https://youtu.be/gFTZQZPkysk

We posted our vide presentation Topic 1 & 2 on 23 October 2021.

2. The conversation with Mr. Farhan from Flip

Maldini : Good morning, Mr. Farhan, I am Maldini from the same group as Ara’s college
assignments. And I got your contact from her, Mr. Farhan.
Mas Farhan : Good morning Maldini, halo Greetings!
Maldini : Thanks Mr. Farhan, You has been willing to be interviewed by our group
Mas Farhan : Its okay , my pleasure.
Maldini : For the time of the interview, would you like to be interviewed tomorrow,
on Sunday?
Mas Farhan : Ok looks good for me too, but I will not available at this hour,
Besides those time, I can arrange you for the interview.

07.00 - 09.00
12.00 - 13.00
13.30 - 18.00

Maldini : Ok, what about at 20.00?

Mas Farhan : Ok, looks fine
Maldini : Ok, Mas Farhan, before 20:00 we will sent you the zoom’s link
Mas Farhan : OK

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Sunday at. 19.45

Maldini : Mr Farhan, I want to make an update. At 20.00 we will sent you the link
Farhan : Alright,
Farhan : Is it any problem happened? Because you have not give the link yet.
Maldini : Yes, we got little problem and we are now fixing that. Wait a minute.
Mas Farhan : Alright.
Maldini : This is the following link, Mr. Farhan.
Mas farhan : Oh okay. wait 2 minutes
Maldini : ok, we are really sorry because we have late for 12 minutes,
thank you very much, Mr. Farhan

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3. The Interview for topic 1 & 2

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