Mandiri Capital CEO Calls E-Payments a ‘Cash-Burning Exercise’
- E-wallets only make money by cross-selling, says Danusaputro
- Mandiri Capital manages $100 million, to invest more in 2020
The venture capital arm of PT Bank Mandiri thinks electronic payment platforms will only ever be profitable by serving as gateways to more lucrative services. Otherwise, they’re “just a cash-burning exercise,” said Eddi Danusaputro, chief executive officer of PT Mandiri Capital Indonesia.
The race for customers in Indonesia is so intensive that e-payment providers have been willing to offer steep enticement discounts, calculating that the immediate cash hit is worth it in order to secure a bigger market share, said the CEO in an interview. In Jakarta, services like Gojek’s GoPay and Grab Holdings Inc.-backed Ovo have been dealing out purchase discounts and cashback as high as 50% and sometimes even 90%, none of which is sustainable in the eyes of the Mandiri Capital CEO, which has itself invested in LinkAja, another competitor in this crowded field.