Tuesday, June 18, 2024

Can Indonesia’s test and trace app become a payments portal?

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Indonesia’s Ministry of Health will integrate the country’s test and trace app, PeduliLindungi, with 11 platforms, including Gojek, Grab, Tokopedia, Traveloka, Dana, and LinkAja, giving users access to PeduliLindungi’s features in widely adopted ride-hailing, e-commerce, travel booking, and payment services. The integrated version of the test and trace app will be officially available in October. At the moment, Gojek and Tokopedia are running a beta of PeduliLindungi in their apps.

PeduliLindungi, which translates to “care and protect,” was launched last year to track confirmed cases of COVID-19 and suspected patients. The app now provides vaccine registration and telemedicine services. The government requires residents in five cities—Jakarta, Bandung, Semarang, Yogyakarta, and Surabaya—to scan a QR code using the app to check-in when visiting public places like office buildings, public mass transportation, malls, and restaurants. The government plans to widen the usage of PeduliLindungi to cover 34 provinces in the future.

The test and trace app has around 55 million monthly active users, according to the health ministry. Its integration with a number of major applications is expected to boost the adoption of PeduliLindungi’s services.

There are precedents for test and trace apps being integrated with popular platforms. Earlier this year, China launched a digital health certificate on WeChat. The certificate includes information about the user’s vaccination status, nucleic acid test results, and serum antibody test results. It can also be provided to authorities overseas as evidence of a person’s health status.

Indonesia’s government has a vision for PeduliLindungi to do much more. Luhut Binsar Pandjaitan, coordinating minister for maritime affairs and investment as well as deputy chairman of the COVID-19 mitigation and national economic recovery team, recently expressed his intention to expand the PeduliLindungi’s scope of services. This includes adding a digital payment feature to boost financial inclusion in the country.

Pandjaitan’s statement has provoked criticism from Indonesians. While PeduliLindungi has the potential to scale up and introduce new services to users, the app is buggy, and many Indonesians believe any attempt to embed complex features like payments will lead to failure. There are at least 15 problems on PeduliLindungi that need to be patched or remedied immediately, according to the Indonesian internet governance forum. These include technical errors like frequent crashes and multiple failed OTP verification attempts. There are also governance issues related to privacy and data protection. The app stores sensitive personal data like each user’s national ID number, phone number, and vaccine certificate.

“PeduliLindungi’s services are not optimal. The check-in requirement is not effective as thousands of COVID-infected patients are still entering the malls. Regarding data security, PeduliLindungi reportedly shares user data with an analytics server owned by Telkom,” said Nailul Huda, a digital economy analyst at the Institute for Development of Economics and Finance (Indef). Although the health ministry collaborated with the state-owned telco to create PeduliLindungi, it is unclear how Telkom will use the data, he added.

A series of high-profile data breaches involving servers used by the government and the private sector have taken place in Indonesia, typically because the systems were not secured. In August, the data of 1.3 million users of the country’s electronic Health Alert Card app, or eHAC, was reportedly exposed due to poor data privacy protocols. eHAC is also integrated with PeduliLindungi, but authorities claimed no eHAC data from PeduliLindungi was leaked.

Despite this denial, data breaches are becoming more rampant. Even the vaccine certificate of President Joko Widodo was circulating on the internet earlier this month. The certificate was allegedly leaked by users who found the president’s data on PeduliLindungi.

Given these many problems, building a digital payment feature for the platform is wishful thinking, said Huda. To operate a successful payments channel, PeduliLindungi will need to obtain a license from Bank Indonesia, and it will likely need to burn capital for costly promotions to acquire users.

Moreover, a payment platform must integrate with the existing transaction ecosystem, especially in retail and e-commerce. “The government may be able to build a payment feature for PeduliLindungi, but I don’t think it can compete with existing players because the fintech payments sector is dominated by venture capital-backed companies. The government should focus on fixing the problems in the PeduliLindungi app before planning to add new features,” Huda said.

Check this out: Data Leaks Hit Indonesia’s Tech Ecosystem

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