On the 28th of October, OJK, Indonesia’s Financial Services Authority, released an announcement on their website stating that they’re revoking the license to operate from a company called PT OVO Finance Indonesia.
OJK has been carrying out a crackdown on illegal fintech lending, and also recently revised the legally permitted daily interest rate of fintech lenders from 0.8%-0.4%. These came after the President Joko Widodo ordered a moratorium on new fintech lending (P2P) licences.
This morning (10 November 2021), news broke in most major news channels across the country connecting this PT OVO Finance to OVO, the wallet that Grab assumed majority control after the other major shareholder Tokopedia exited following the merger with Gojek.
However, if you understand and see a little deeper, you can actually see that PT OVO Finance is not related to OVO, the wallet at all.
OVO, the wallet, is operated by an entity called PT Visionet International and not by PT OVO Finance.
Besides, payment/wallet operations in Indonesia are licensed and regulated by the Bank Indonesia (BI) not by OJK (check out our Rise of Digital Banks in Indonesia as well as Fintech in Indonesia reports for more details).
Why were so many people confused about this? The media, and social media, of course. Screenshots of the OJK announcement were shared (below), and it is indeed easy for the uninformed to mix the two companies:
- The company name: PT OVO Finance Indonesia which many thought that it’s OVO, the wallet. It is the same OVO name after all.
- The company’s address: Gedung Lippo Kuningan → many know that Lippo was the original founder of OVO (the wallet), before Grab and Tokopedia bought shares.
As we understand, PT OVO Finance Indonesia initially was established with the aim to secure multifinance and other lending licenses, and with the intention to become a fintech lender. It shared some initial shareholders with PT Visionet Internasional (OVO the wallet) but has no legal relation with the latter even before Grab’s acquisition of shares.
While PT Visionet Internasional, or OVO wallet, has grown to become a unicorn, and the largest non-embedded wallet player in Indonesia:
It is interesting to note that GoTo also had an incident recently. A company called PT Terbit Financial Technology is suing GoTo for Rp2 trillion (US$140 million) damages over the trademark of GoTo name. Lots of smoke out there, but the GoTo trademark lawsuit is probably far less a clean cut compared to the OVO name issue.
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].