OVO And DANA Mau Merger To Compete GoPay

JAKARTA - Two startups that provide digital financial services, OVO and DANA, are rumored to be merging their companies (merger). Rumor has it that the merger of these companies was done to fight GoPay's dominance in digital payments.

Quoted from a Bloomberg report, the two startups have discussed merger plans since the end of 2019. However, due to the corona virus pandemic, the plan to sign the agreement between the two parties had to be postponed.

Currently, the two companies are still discussing a number of details and their business plans going forward. Matters related to the agreement regarding the terms and time of the agreement may still change.

As for OVO and DANA's steps to merge, they were actually done in order to compete with GoPay. According to a close source, the two companies even agreed to reduce their money-burning strategy in attracting the market.

So far, OVO, DANA and GoPay are big players in the fintech (financial technology) market. These three companies even have foreign investors to back their funds.

OVO itself has received capital injection from SoftBank Group Corp, which is also supported by Grab Holdings Inc. Meanwhile DANA is affiliated with the capital of Alibaba Group Holding Ltd.

Meanwhile GoPay, which is part of Gojek, recently received an injection of funds from Facebook Inc. and PayPal Holdings Inc. The investment was also used to develop Facebook's business in Indonesia.

"The agreement between OVO and DANA also strengthens the alliance between Alibaba and Softbank and consolidates the digital payment market in Indonesia," VOI quoted Monday, June 15.

Of course, this merger agreement also helps Grab Holdings, which is still based in Singapore, to compete with Gojek in Indonesia, both in terms of the transportation market and digital payment services.

Moreover, this merger also allows the creation of the largest digital payment platform in Indonesia. So, with this merger, it can consolidate the fintech market by making fewer major players.