The term “latte factor” was popularized by America’s bestselling financial author David Bach. This term refers to various small routine expenses that can have a large enough impact on our finances. In fact, these expenses are not necessary and can be eliminated.
The word “latte” is taken from one type of coffee serving that is quite popular called Caffe Latte, which is a mixture of coffee with milk and has a thin layer of foam on top. Its use in latte factor refers to the habit of people who unknowingly buy coffee on a regular basis to increase their productivity.
According to David Bach, coffee is one of the small-scale expenses that can have a total expenditure exceeding the cost of electricity and water if it is done regularly in a month. The spending on coffee itself is usually not that important. However, if it is done continuously, the impact will be felt on financial management.
Latte Factor in the Digital Era
The discussion about latte factor cannot be separated from financial management. It is not only about excessive coffee consumption, but also describes various less important routine expenses. The examples are buying snacks, eating out, buying cigarettes, buying bottled drinks, and others.
Small urgent expenses that can develop into someone’s latte factor also remain in this digital era. For example, an employee can spend around IDR 360,000 – IDR 648,000 in 24 working days if he is used to taking online transportation modes to go to work. This basis of assumption is from the cheapest fare calculation for motorbike which is around Rp. 15,000 – Rp. 27,000.
However, the calculation is only based on the cost of traveling from place of residence to office. If the same employee chooses to use online transportation to return home after work, his expenses would be doubled or more.
In addition to online transportation, the extra costs in banking services can also be considered latte factor. Customers can spend up to hundreds of thousand rupiah if they have high frequent interbank transfer activities. For example, transferring money between different banks at least once a day for 30 days with fee per transaction around IDR 6,500.
The two examples above are latte factors that are common today. However, minimizing the latte factor does not mean prohibiting an employee from leaving for work using online transportation modes or prohibiting customers from transferring money to a different bank.
An employee can commute to the office using an online transportation affordably when he gets a discounted promo. If there is no promo, he can use the Transjakarta bus or other public transportation that offers low cost. He can also opt to use private vehicles such as motorbike to avoid traffic.
The same principle also applies to bank customers. He can use ATM Link which offers banking services such as balance inquiry, cash withdrawals, and transfers at a more affordable cost. In addition, digital wallet or third-party applications that offer cheaper rate can also be a solution.
Meanwhile, for fans of online shopping, promotional programs from the marketplace can be a simple solution to minimize the latte factor. Examples are free shipping promotions, cashback, discounts, and many more.
Managing Latte Factor
The best way to identify our latte factor is to track it down. The trick is to keep a record of expenses for every penny we spend each day. Also, take advantage of the balance information and mutation feature to track the expenditure and income.
Recording these expenses must be done consistently for at least one to three months to get the best results. That way, we can better identify the weakest areas in our spending. If we have found it, we can reduce our latte factor according to our financial capabilities.
Even so, the latte factor itself is not about sacrificing the happiness we deserve from the “latte” in a cup of coffee. It is about how we can filter things that give more value to our lives.
If we can reduce or even eliminate those extra expenses, our quality of lives will be better. We can divert the extra money for more useful needs, such as pension investment, health investment, education investment, and many more.
Bank Sumut and Jalin (PT Jalin Pembayaran Nusantara) have signed a memorandum of understanding for membership cooperation in a virtual ceremony on Wednesday, August 18, 2021. This signing event marks that Bank Sumut officially joining the Link network managed by Jalin as the biggest BPD Book II member. The expectation of the firmly established partnership synergy between the two companies is to support the payment industry advancement in the Republic of Indonesia.
The signing ceremony was attended by Mr. Boyke Yurista as CEO of Jalin and accompanied by Mr. Eddy Sofryano as COO of Jalin, Mr. Aries Barkah as CCO of Jalin, Mr. Fajar Adimarta as CTO of Jalin, Mrs. A. Pawitra as CFO of Jalin, and several employees of Jalin. In addition, Mr. Rahmat Fadillah Pohan as the Director of Operation of Bank Sumut was also present and accompanied by Mr. Hadi Sucipto as Marketing Director of Bank Sumut, Mr. Irwan as Director of Business & Sharia, Mr. Eksir as Director of Compliance, and division heads with several employees of Bank Sumut.
With the signing of this cooperation, Bank Sumut customers now can proceed transactions through the ATM Link network spread throughout Indonesia. Currently, the number of ATM Link itself has reached 43,000 units.
Through this collaboration, Bank Sumut and Jalin are ready to growing up and synergize together to strengthen the payment system industry for the betterment of the beloved Republic of Indonesia.
The Pandemic has hit various industrial sectors hard, and a few of them have ended up bankrupt. One of the sectors that feels this impact in Indonesia is the MSME sector. However, not all MSME players have gone out of business because some have discovered new ways to survive amid a pandemic, namely by embracing digitalization.
In Indonesia, MSMEs are one of the country’s economic drivers, accounting for 60.34% of the country’s Gross Domestic Product (GDP) in 2018. The total number of workers in Indonesia absorbed by the MSME sector is also quite large, amounting to 115 million people, or approximately 97.02% of all Indonesian workers.
Unfortunately, when the COVID-19 pandemic began to spread widely in Indonesia, it had a negative impact on several MSME players. According to data from a survey report on MSME actors in Jabodetabek conducted by the Katadata Insight Center (KIC) in June 2020, approximately 82.9% of business actors were negatively impacted by the pandemic. Approximately 63.9% of MSME players saw a drop in turnover of more than 30%.
The Steps to Digitizing MSMEs During a Pandemic
The condition of the MSME sector being hit by the pandemic, of course, cannot be allowed to worsen by the government. Let alone the position of MSMEs in the economy of the country is quite important. Therefore, the government continues to accelerate the digitization of MSME players through various programs, either launched or new ones.
MSME players who have succeeded in seeing digitalization as an opportunity have also proven to survive during a pandemic, especially when the government has imposed super tight restrictions on activities. According to the findings of the KIC survey, 80.6% of MSME actors said that they felt helped by using the internet.
If digitalization is proven to help MSMEs survive in times of crisis, the next question is what technology services can be used as new moves by MSME players to prevail in times of distress? Check out our summary below:
Utilize Marketplace Services
The marketplace is an intermediary that provides services or platforms to connect buyers and merchants to conduct buying and selling transactions in cyberspace. It is like an online department store. The marketplace that operates in Indonesia can be divided into two types, namely pure marketplaces and consignment marketplaces.
The pure marketplace is a marketplace service that provides stalls for selling the product or services, payment facilities from various financial institutions, to logistics services that have collaborated with related marketplaces. Meanwhile, the consignment marketplace is a marketplace service that offers a cooperation system such as depositing goods for resale at the service. MSME players can use this channel to market their products or services according to their individual needs.
The steps to register and open an online store on a marketplace service are also easy because merchants only need to register their active email. After that, if the merchants want their account verified, they need to fill in personal information and upload several documents. If the opened online store is already a legal entity, the merchants can upload several administrative documents to verify the store becomes an official store.
Small and medium-sized businesses can gain access to untapped markets by using marketplace services to open an online store. This opportunity is the best momentum to expand services because, according to BI Governor Perry Warjiyo in Kompas, the value of online shopping transactions this year is predicted to reach IDR 395 trillion, or grow 48.4 percent annually (YoY). It means that Indonesians will shop online more often, and this trend does not appear to be slowing down.
Embracing Digital Payments
The increasing trend of online shopping in Indonesia also has a positive impact on other sectors. One of the sectors that are feeling the benefit is the digital payments sector. In Indonesia, the digital payment services that operate are no longer limited to mobile banking, internet banking, and credit cards but also include digital wallets, electronic money, online loans with pay later systems, and QRIS codes.
Bank Indonesia predicts that the value of electronic money transactions can reach IDR 278 trillion, or grow 37.7% (YoY), for the whole of 2021. Meanwhile, the value of digital banking transactions is projected to reach IDR 35,600 trillion, or a growth of 30.1%, for the whole year of 2021. Meanwhile, merchants who have used QRIS, according to data from Bank Indonesia as of the 3rd week of July 2021, have reached 8.1 million merchants, and 86% are MSMEs. The government has also targeted the use of QRIS in Indonesia by 2021 to reach 12 million traders.
Payment system service providers (PJSP) are also currently promoting the #AyoPakaiQRIS campaign to support the achievement of these targets. Through this campaign, PJSP continues to educate merchants through various communication channels about the advantages of QRIS, which makes payments for buying and selling transactions easier.
It’s also easy to register a business so that you can receive QRIS payments. Merchants can check the list of providers that support the service at https://aspi-indonesia.or.id/information-qris first. After that, they follow the registration procedure according to the service provisions by completing the business data and documents requested by the PJSP for the business verification process.
By embracing a digital payment system, entrepreneurs completed the choice of payment methods that can be used easily by customers and themselves. In addition to facilitating remote transactions from anywhere and anytime, digital payment services, in general, can also assist merchants in recording their transaction history so that they can make financial reports of the business they run even simpler.
Learn to Market Products Digitally
In addition to online shopping services and digital payments, small and medium entrepreneurs need to broaden their digital marketing knowledge. By using digital marketing, they can unlock opportunities to increase the sales of their products and services. There are two choices, using a paid digital advertising service or optimizing digital content such as articles, videos, or designs.
Indonesia is one of the countries with high internet penetration. According to APJII survey data in 2020, the number of Indonesian internet users has reached more than 196 million people, or about 73% of Indonesia’s population. Regarding the devices, smartphones are the favorite devices of internet users in Indonesia. The number reached 95.4%. Meanwhile, from laptops/tablets only 19.7% and from PCs, 9.5%.
Meanwhile, the five main reasons internet users access the internet are to access social media services (51.5%), message-based communication (32.9%), online games (5.2%), access to public services (2.9%), and online shopping (1.3%). It means more people are spending their time in cyberspace using smartphones and other advanced technologies.
This change in behavior signals a significant market shift, from offline to online. Therefore, just doing conventional marketing to reach the market to increase sales is not enough. Nowadays, small and medium entrepreneurs also need to learn digital marketing to market their products or services in cyberspace.
The first step can start by taking digital marketing webinar classes for online platforms. Then put it into practice by learning how to optimize digital content that can be uploaded to various channels based on the needs.
For example, if you want to upload content to Instagram, the optimization that you need to learn is making attractive designs, copywriting, to short videos. If you have mastered Instagram, you can try other channels such as Youtube for videos, Blogs for articles, and Tiktok for short videos.
After that, you can go to the next level in learning keywords and data analysis to apply in to paid digital marketing channels. Examples are Facebook Ads, Google Ads, and so on.
Creating Your Website
If small and medium entrepreneurs mastered content creation and optimization, there’s nothing wrong with building their website. It can function as a company profile or become an independent online shop if they have sufficient capital. By creating a website, the level of customer trust in the products or services owned by entrepreneurs can increase.
In addition, they will also have more flexibility to optimize their digital channels. For example, to build new partnerships with other companies, heighten Search Engine Optimization (SEO), optimize feature products or services to increase sales, develop new digital innovations, and more.
Digitization is the answer for SMEs to survive in times of crisis
Technological innovations that move quickly have touched various aspects of life. We can feel the impact of changes in people’s behavior, who are now doing more activities in cyberspace such as online shopping, playing online games, and reading online news. This phenomenon is moving faster because driven by the pandemic situation, which limits many face-to-face activities.
The dynamics of rapid market changes ultimately require many business players to change to remain relevant and not losing their loyal customers. The MSME sector is one of the many sectors in Indonesia that are needed to keep up with this rapid market change, given its important position in the nation’s economy.
Therefore, the government continues to encourage the acceleration of the digital transformation of MSMEs through various programs. These efforts were to help small and medium entrepreneurs not to be left behind and eroded by the fast-changing times.
The steps taken by the government are also not easy because most of the small and medium business players come from groups of people who rarely come into contact with new technologies. So, there needs to be cooperation from various parties to continue to educate them and strengthen the existing digital ecosystem so that they want to join the same pool.
In addition, transforming business towards digital in a time full of uncertainty has proven effective in making MSMEs more resilient in doing their business. Besides being able to open new market opportunities and increase sales, digital transformation can also maintain the health of business players because it reduces social contact with people and reduces the chance of being infected by the COVID-19 Virus.
Digital transformation is only one of many innovations that will be born in the future. In the end, those who will survive in the long term are small and medium entrepreneurs who have the will to continue to learn, develop themselves, and embrace the changes that occur in society.
Digital transactions are a necessity amid the rapid development of technological innovation. In Indonesia, this situation is noticeable from the changing behavior of people who increasingly use technology-based financial services to facilitate their cashless transaction activities. Some of the services that have experienced this growth are debit cards, electronic money, and digital banking.
Bank Indonesia (BI) stated that Indonesia’s digital economic and financial transactions in 2021 will continue to grow in line with increasing public expectations and preferences for online shopping. This growth is visible in a significant increase of the volume and value of transactions for various non-cash payment methods that utilize the latest technology services.
According to BI records, the value of Electronic Money (EU) transactions in May 2021 reached IDR 23.7 trillion, or an increase of 57.38% (yoy). In addition, the volume of digital banking transactions also continued to grow and recorded a growth of 56.49% (yoy) or reached 601.2 million transactions in May 2021, with a transaction value that grew 66.41% (yoy) of Rp3,117. 4 trillion.
Meanwhile, the value of transactions using ATM cards, Debit Cards, and Credit Cards for payment in May 2021 also grew by 21.03% (YoY), with a total of IDR 689.7 trillion. One of the drivers of this positive movement is the increased economic activity due to the needs of the community ahead of Eid al-Fitr 1442 H amid the pandemic situation.
Behind this rapid growth, there is the role of various financial industry players who are trying to encourage the advancement of the digital payment system in Indonesia. One of them is the Payment System Infrastructure Operator (PIP), such as switching institutions. Even though they do not interact directly with customers, switching institutions enable a seamless interbank transaction process, thereby providing a better experience for customers.
In a nutshell, switching in the payment industry is an electronic system used to connect communication lines between banks. That way, transaction data processing between banks and other digital financial industry players can run seamlessly.
Jalin’s active role in facilitating the growth of digital transactions in Indonesia
In Indonesia, one of the experienced switching institutions that support digital transaction and payment systems is PT Jalin Payment Nusantara (Jalin). Jalin has two primary services, namely Switching with the “Link” brand and Managed Service for ATMs. In addition, Jalin also innovates through the development of a modern and integrated digital platform in line with transaction needs that continue to transform in the digital era.
The switching that supports the transactions of 35 bank and non-bank members of Jalin has three service scopes, namely ATM Switching, Debit Switching, and QR Switching. These three services enable customers to conduct transactions seamlessly and comfortably. For example, customers cash withdrawal transactions, balance inquiries, transfer of funds, or paying bills through all banking channels incorporated in the Link switching network.
Meanwhile, Managed Service (MS) offers comprehensive ATM management and maintenance services. The scope of services consists of ATM Machine Rental, Second Level Maintenance ATM, ATM Premises Maintenance Services, ATM Cash Monitoring & Forecasting, 24/7 ATM Monitoring Services, to ATM Branding.
Collaboration and synergy with BUMNs and professional partners engaged in the financial services sector also continuously forged and strengthened. Hence, the operational services quality and the digital innovation and physical channels development such as ATM, CDM, and CRM can continuously improve. It is one of the steps taken by Jalin to connect the community with the financial and non-financial ecosystems to create a secure, integrated, interconnected, and efficient interoperability payment system.
In the future, Jalin will also expand its services to include cross-border QRIS, infrastructure sharing, and technical support for each banking service. This is aligned with Jalin’s vision as The National Digital Highway so that people can enjoy secure, comfortable, and efficient transaction services.
Currently, Indonesian banks encourage their customers to replace their magnetic stripe-based ATM cards with chip-based ATM cards. This step is a follow-up to the letter issued by Bank Indonesia regarding the replacement of ATM cards. If customers aren’t replacing their ATM cards, they cannot make transactions because the banking system will automatically block the use of magnetic-stripe-based ATM cards starting from December 21, 2021.
This blocking is under the BI Letter Number 17/52/DKSP concerning the Implementation of the National Standard for Chip Technology and Use of Personal Identification Numbers on ATM Cards and/or Debit Cards issued in Indonesia. The chip-based ATM card itself is already used widely by banking systems in various countries and has become a global standard.
One of the goals of replacing ATM cards with chip-based ones is to increase card security. Bank Indonesia has also set NSICCS as the national standard for chip technology on ATM/Debit cards which refer to EMV and the global platform in the preparation. NSICCS stands for National Standard for Indonesian Chip Card Specification.
So, what are the advantages of this chip-based ATM/Debit cards? Check the following explanation.
1. Safer Transactions
Better card security is one of the advantages offered by chip-based ATM cards. The chip technology embedded in it can store a Personal Identification Number (PIN) and can only be processed if the customer enters the PIN correctly at the ATM or EDC machine.
2. Difficult to Duplicate
Chip-based ATM cards are also difficult to duplicate because the data stored on the chip can only be verified for authenticity by offline and online CAM (Card Authentication Method) methods which are more secure. Meanwhile, data on magnetic stripe-based ATM cards are easier to duplicate because it stored on magnetic tapes that do not have PIN protection.
3. Has a Larger Data Storage Capacity
Chip-based ATM cards also have a larger data storage capacity when compared to magnetic stripe-based ATM cards. It is because the chip embedded in it has CPU, memory, operating system, applications, and cryptographic functions that can also affect the transaction speed.
4. Can Transact with a bigger nominal
Chip-based ATM card owners can make transactions with a bigger nominal compared to magnetic stripe-based ATM card owners. Bank Indonesia has raised the limit for cash withdrawals via ATMs for chip-based card holders, from a maximum of IDR 10 million per day to IDR 15 million per day. Meanwhile, interbank transfers rose to IDR 50 million per day from a maximum of IDR 25 million per day. The limit is adjusted to the type of card and the policy from the bank that issued the card.
5. Stronger Physical Card
The physical chip-based ATM card also has better strength when compared to the physical magnetic stripe-based ATM card. It needs stronger protection because they need to protect the chip technology, which has CPU and memory embedded in the card.
Stay Alert When Doing Transactions
The purpose of replacing chip-based ATM cards is to increase security when transacting. However, the way someone commits a crime to enrich themselves will also continue to develop along with technology development.
For example, a recent fraud mode that asks the customer to replace the card through a telephone connection or via chat on behalf of a particular bank. Therefore, it is necessary to be a sharp customer and be aware of crimes that could occur.
The steps can start from getting used to changing PINs regularly, getting used to transact in crowded places, and consistently checking mutations regularly, so we can immediately find out if there are suspicious transactions.
PT Jalin Pembayaran Nusantara (Jalin) updated the Hardware Security Module (HSM) marked by the ‘Key Ceremony of Custodian Local Master Key (LMK)’ activity, Thursday (22/07). Held at the Jalin Data Center in Tangerang, the HSM update aims to improve the security of digital transactions for Jalin’s customers using qualified modules according to security standards set by the regulator.
Basically, HSM is a data security module that serves to protect customers from leakage of sensitive/critical data that has the potential to be misused by irresponsible parties. Customer sensitive data will be encrypted/encoded so that it cannot be read/opened by any party from a payment system.
In supporting its digital innovation for financial services, Jalin constantly uses HSM devices that also comply with world security standards, namely Level 3 of FIPS 140-2, PCI HSM v3, and PCI HSM v3 KLDm AusPayNet. The HSM used supports high-level algorithms, hence helping to ensure the security of member bank’s card issuance. The use of key blocks in accordance with the PCI-DSS PIN Security Requirements and VISA Security Requirements has also been implemented.
Collaborating with PT Dymar Jaya Indonesia as the third party of HSM modules provider, the Key Ceremony was attended by three key custodians appointed by Jalin to ensure the confidentiality and credibility of the key installation process. In addition, the entire activities complied with procedures and high security standards to ensure data protection for Jalin service users. Covid-19 health protocols were also strictly implemented.
In the future, HSM functions and features will always be updated according to the times. It is in line with Jalin’s commitment to support Indonesia’s payment system infrastructure that is reliable, modern and innovative. Hence creating the service system that is secure and convenient to support people’s digital payment transaction activities.