All-Digital Financial System, Endangered ATM Machine

JAKARTA – The pandemic has pushed digitalization in various sectors including finance. Coupled with people who are used to online payment systems. This has an impact on reducing ATM transactions.

Perry Warjiyo as Governor of Bank Indonesia (BI) explained that digital financial transactions are experiencing rapid growth. Warjiyo stated that this was the impact of "online shopping, expansion and convenience of digital payment systems and acceleration of digital banking," Warjiyo said.

BI reported that as of January 2022, online payment transactions experienced rapid growth of 66.65 percent on an annual basis. That means electronic money transactions penetrated Rp. 34.6 trillion. In addition, digital banking transactions have increased by 68.2 percent annually to reach Rp.4,314.3 trillion.

Meanwhile, money transactions using ATMs via debit and credit cards continued to grow by 14.39 percent to Rp711.2 trillion. This figure is still below digital transactions. Transactions using QRIS also grew significantly due to high public interest.

"Bank Indonesia continues to encourage payment system innovation and maintain the smooth and reliable payment system," added Perry.

Head of Perbanas Kartika Wirjoatmodjo assessed that the increase in digital transactions has the potential to threaten the existence of ATMs. In fact, ATMs have the opportunity to "retire" from the community.

“The challenge for banks now is how to retire old models, for example ATMs. What about the future of ATMs, is it still relevant? Will it be deleted when there are no more public area cash transactions?” added Kartika in the G20 Indonesia 'side event' “Casual Talks on Digital Payment Innovation”.

Kartika explained that five years ago consumers only had three types of payment options, namely by transfer, debit card and credit card. So the change to digital transactions is considered to be beneficial for consumers themselves.

“Now there are other ways to use digital wallets, digital applications and others. So users can choose which one is the cheapest and easiest to use in transactions. Different segments have different preferences," Kartika said as quoted by CNBC Indonesia.