The Unbundled Economy and the Rise of Open Networks in Indonesia’s Financial Inclusion

JAKARTA, Investortrust.id — At the 12th annual Indonesia Economic Forum, a gathering of the nation’s most influential digital architects and policymakers signaled a move away from the "super app" era toward a decentralized future.

During a panel discussion titled "The Open Network: Powering Financial Services," industry leaders argued that the Indonesia Open Network (ION) is not just a technological upgrade but a structural necessity for the 64 million micro, small, and medium enterprises (MSMEs) that form the backbone of the economy.

Nilay Patel, the founder of EasyPay and a pioneer in India’s Open Network for Digital Commerce (ONDC), described the two nations as "digital twins" characterized by young, massive populations ready for a shift in how they consume services. Patel warned that the current dominance of monopolistic platforms resembles a form of "digital colonization" that stifles local innovation.

The architectural premise of an open network like ION differs fundamentally from the centralized platforms that have dominated the last decade of e-commerce. While traditional platforms operate as "walled gardens" where a single entity controls the buyer, the seller, and the data, an open network functions as a decentralized protocol where these components are "unbundled".

Siddharth Prakash, Head of Product Strategy for Emerging Markets at Google Cloud, explained that this decoupling allows for a "platform of platforms" where no central authority governs the ecosystem. In this construct, data remains "at the edges," meaning small businesses retain ownership of their transaction history rather than surrendering it to a platform that might use it for its own competitive advantage.

This shift in visibility is perhaps the most significant benefit for small merchants currently struggling with the costs of digital participation. Sourabh Gupta, Senior Vice President of Product at Flip, noted that many MSMEs currently pay what he calls a "tax" of 20% to 25% in commissions just to gain visibility on closed platforms.

"The potential that ION has is that someone in Jakarta can buy from a handicrafts maker in Bali without that person having to incur this tax," Gupta said, emphasizing that decentralization provides a "decentralization of visibility" for those previously priced out of the market. By unbundling goods from logistics and payments, the network allows a seller to "onboard once and be visible for everybody," effectively democratizing market access.

The moderator of the panel, Bayu Prawira Hie, a digital transformation expert, underscored the urgency of this transition by highlighting the specific needs of the "micro" segment of MSMEs, which constitutes more than 99% of the nation’s business units. Hie pointed out that while Indonesia has seen a surge in consumer lending, the real challenge is facilitating "loans for productivity" to help small businesses grow.

He observed that many micro-businesses have no track record of data, making it nearly impossible for traditional banks to assess their creditworthiness. Open networks address this by creating a digital footprint through every transaction, which can then be used to underwrite loans without the need for traditional collateral.

Implementing such a system requires more than just code; it demands a "Pentahelix" collaboration involving government, academia, the private sector, associations, and the media. Ronald Walla, Head of MSME at Apindo and President Director of PT Wismilak Inti Makmur, stated that the most fundamental issue for entrepreneurs is "access to market information," which ION is designed to provide.

Ronald noted that "collaboration requires trust to be able to work together," and the ION system provides the necessary transparency through "automatic data exchange" to build that trust between lenders and borrowers. He expressed excitement that the network would allow stakeholders to "slowly gather more and more information" to support better policymaking and capacity building.

For the financial sector, the open network allows for a competitive bidding environment that empowers the consumer. Patel explained that on a common protocol, "10,000 NBFCs and hundreds of banks" could potentially bid for a single borrower’s profile, allowing the user to choose the most favorable interest rates and repayment conditions.

This transparency is a sharp departure from the current model where a borrower’s options are limited to the partners of the platform they happen to be using. Patel shared his experience in India, where the first loan on ONDC was completed in under six minutes—a timeframe he expects to eventually shrink to "six seconds" as the network matures.

Despite the high-tech foundation, the panelists agreed that the success of ION depends on its simplicity for the end user. Prakash argued that the "barrier to entry" must be kept low to avoid adding a new layer of friction for non-tech-savvy merchants in rural areas. Google is working on building "smart intelligent agents" that allow MSMEs to interact with the network in their local language, handling the complexities of the Beckn protocol behind the scenes.

As Indonesia moves toward its "Golden Vision 2045," the focus is on ensuring that these digital tools act as a "digital highway" for all. As Patel concluded, an open network is like a "Lego store" where, regardless of size or gender, everyone can sit at the table and "start building".