Why Indonesia’s Credit Card Market Is Poised For Growth

Buy now, pay later (BNPL) has surged in Indonesia over the past few years, plugging a large lending gap and in many cases acting like a credit card in all but name. BNPL has grown so briskly in Indonesia that some analysts believe it will replace credit cards altogether.

Perhaps not. First, in a country Indonesia’s size – 273.8 million people – even a niche credit card market is worth pursuing. Credit cards can offer much larger credit limits than BNPL, as well as many rewards. Second, BNPL firms often lose money, while credit card companies and their banking partners generally do not. The credit card business model has been proven to be sustainable. Third, the Indonesian government wants to build up a domestic credit card network, showing that this form of payments has regulatory support.