How Indonesia’s Cermati is becoming a major force in fintech

In The Top Up this week, we dive into fintech aggregator Cermati and look at the delayed launch of Apple’s BNPL service. [Read from your browser]( The Top Up 💵 Welcome to The Top Up! Delivered every Wednesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. If you’re not a subscriber, get access by [registering here](. Written by Budi Sutrisno Journalist Hello {NAME} For a company whose valuation grew by almost 10x in four years, Cermati has mostly escaped the international spotlight. And that’s what brings us here. The Indonesian fintech firm has attracted investors like Djarum, the local conglomerate that owns ecommerce firm Blibli and online travel agent Tiket. Both Djarum units are also Cermati’s business partners. What’s special about Cermati is how it started out as a comparison site for financial products like insurance and personal loans and then evolved into an all-around fintech group providing lending services and more. Several financial comparison sites have tried going down this path, but not all have been successful. In this week’s Big Story, I dissect the company's various ventures and how they fare against competitors. Among these ventures is an uncommon “as-a-service” path that has allowed Cermati to cross-sell its core products more efficiently. Meanwhile, for this week’s Hot Take, I look at the delayed rollout of Apple’s buy now, pay later product and why it’s unlikely to move the needle in a market like Indonesia - if it even launches here. – Budi  --------------------------------------------------------------- THE BIG STORY [How Cermati’s valuation grew almost 10x in under 4 years]( The Indonesian company’s “as-a-service” model allows it to glue its core financial products together more efficiently.  --------------------------------------------------------------- THE HOT TAKE  Why Apple’s BNPL delay won’t disappoint Indonesians Here’s what happened: - Apple’s buy now, pay later product and other planned offerings have [hit a snag](. - Called Apple PayLater, the product was introduced in June 2022 and [originally]( set to be rolled out last September. However, the launch date was pushed back due to technical difficulties. - Last week, the company expanded an internal test of Apple PayLater to thousands of its retail workers. Here’s our take: Apple indicated that its BNPL product was close to launching by [expanding internal testing to its retail staff]( last week, but there wasn’t much hype about it in Indonesia. In fact, Apple PayLater has sparked little to no interest in the archipelago since the plan was first announced in June 2022. Perhaps the lack of fanfare can be attributed to how Indonesia already has established BNPL players including Kredivo and Akulaku. But another factor could be how as of July 2021, Apple only took up [less than 9%]( of the mobile phone market in the country. Apple PayLater will only be available to Apple Pay users, but a majority of Indonesians use Android devices. Besides BNPL, Apple also hit the brakes on the launch of its savings feature, which was introduced in October 2022 and will be tied to the Wallet app. It also shelved plans for an iPhone hardware subscription program that will charge users a monthly fee to rent devices. One reason for the slowdown is that Apple will be handling credit checks, approvals, and transaction histories by itself instead of working with third parties. Even for dedicated lending institutions, this is not an easy task. In Indonesia, many online lenders partner with [credit-scoring firms]( to perform credit checks on prospective users, and only a few have their own platforms to do so. Some marketplaces like Tokopedia can [do this in-house]( but many others - despite having user data - need to work with fintech players like Kredivo for credit scoring. See also: [As digibanks rise, will Indonesia’s online lenders become obsolete?]( Apple PayLater’s imminent launch also comes at a time when global BNPL firms are struggling. [Klarna]( and [Affirm]( have trimmed their workforces due to mounting losses. Meanwhile, Australia-based Openpay [collapsed]( earlier this month. However, there remains some optimism as global BNPL payments are still [expected to grow]( by around 33% on an annual basis until 2026. For now, it’s uncertain whether Apple will roll out its BNPL product in Indonesia. But what’s clear is that Indonesia will likely be a tougher market to crack than the US. Given the multitude of options available, it’s unlikely that working Indonesians - the main target demographic for such an offering - will trade in their Android phones for an iPhone in order to access the installment plan. Also, iPhones are considered a high-end product in Indonesia, so its users are generally affluent and may have no need for a BNPL product. A more ideal market to test out in Southeast Asia would be Singapore, where the number of Apple users is higher. But even then, Apple will face tough competition from existing players like Grab PayLater and Atome. – Budi  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [Australian BNPL firm Openpay collapses]( The company has gone into receivership, which will see it designating trustees to handle assets to help repay creditors. 2️⃣ [Social commerce platform WeBuy seeks $20m to launch financial services (Exclusive)]( The startup has ventured into higher-ticket services like travel and plans to offer insurance, renovation packages, and even home loans. 3️⃣ [Aspire raises $100m series C, says annual volume has tripled]( The Singapore-based startup, which offers cash flow management and B2B payment services, serves over 15,000 business clients across Southeast Asia. 4️⃣ [Fintech unicorn PhonePe adds international support for UPI payments]( Indian travelers can use UPI to transact at supported shops across the United Arab Emirates, Singapore, Nepal, and Bhutan. 5️⃣ [InsuranceDekho bags $150m to ‘democratize’ insurance in India]( Consumers can compare different insurance policies via the platform and choose the most suitable plan. 6️⃣ [Vietnam’s Masan Group to invest $105m in SG fintech firm]( With this deal, Masan aims to accelerate its application of AI in retail and consumption.  --------------------------------------------------------------- That’s it for this edition - we hope you liked it! 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