Card payments growth in Indonesia is expected to mellow to 1.7% this year as consumers veer away from non-essential purchases. However, the market is likely to bounce back 7% in 2021 with a forecast to reach $63.9b in 2024. To provide relief to cardholders and push card usage, the government has reduced credit card interest rates from 2.25% to 2% per month and minimum repayment from 10% to 5% of total outstanding, effective 1 May. The resurgence of the tourism industry and opening up of business activities will encourage consumer spending, which in turn will accelerate the recovery of the country’s card payments market.
Indonesia is pushing ahead with a years-long plan to merge the Islamic units of its state-owned lenders, which could form an entity with $15b of assets by February 2021. Bank Mandiri, Bank Negara Indonesia and Bank Rakyat Indonesia signed a conditional deal on Monday to combine their Shariah-compliant units.