23 CHAPTER IV ANALYSIS AND DISCUSSION 4.1 Environmental Scanning 4.1.1 External Environment Analysis The external environment refers to the mobile money external condition as well as the e-money condition in general as mobile money is also a part of e-money. a. General Environment Analysis  Demographic environment Out of 250 million people in Indonesia, only 30% of them own bank account (Prasetiantono, 2015: 15). On the contrary, there are 303,695,000 cellular mobile phone subscribers in 2013 (Business Monitor International, 2013: 18), which exceeded the number of population itself. According to McKinsey Global Institute (2012: 4), there are 45 millions Indonesian people in the consuming class and estimated that it will increase to 135 million people by 2030. Furthermore, 53% of the population are living in the urban areas and estimated to reach 71% in 2030 with the continuous urbanisation in Indonesia (McKinsey Global Institute, 2013: 4). Based on mobile money survey conducted by InterMedia for its Financial Inclusion Insights (FII) in 2014, there are three types of financial services users in Indonesia: 1.Bank users : urban, male, and above the poverty line 2.Nonbank Financial Institution users : rural, female, and below the poverty line 3.Hybrid users : urban, female, and above the poverty line Figure 4.1 shows the demographic percentage of each user type in Indonesia. The percentage shows that most of the Indonesians are NBFI userswho are living in the rural area and below poverty line. Therefore, it is reasonable that many of the Indonesians are not using non-cash payment instruments. Figure 4.1 Demographic Percentages of Financial Services Users in Indonesia Source: InterMedia (2014) 24  Economic environment Indonesia‟s booming middle class has become one of the contributive factors to the nation‟s expanding economy. According to McKinsey Global Institute (2013: 7), “53% of population in the cities produced 74% of GDP”. Moreover, “6.5 million migrant workers abroad sent US$7.2 billion home in 2012” (Camner, 2013: 5). According to Camner (2013: 5), “the mobile and rapidly urbanising population in Indonesia is increasing the demand to move money throughout the country and to handle payment with greater efficiency”. To improve efficiency and business climate in Indonesia, Bank Indonesia launched Gerakan Nasional Non Tunai (GNNT) on August 14, 2014 to create „less cash society‟ within the nation (Martowardojo, 2014: 3). Together with e-money issuers and public service providers, Bank Indonesia has initiated several programs to encourage the use of electronic money (Martowardojo, 2014: 3). On the other hand, with a large number if Indonesian migrant workers abroad, mobile money players have also provided remittance service that enabled migrant workers to send money home to their family. Figure 4.2 Mix of Consumer Payment Instruments (Value & Transactions) Source: Ghosh (2014) Even though e-money usage in Indonesia is increasing each year, cash is still dominantly used for transaction payment. Currently, 99.4% of total retail transactions are still using cash, which is higher than neighbouring countries Malaysia with 92.3% and Singapore with 55.5% (Dewi, 2014: 10). Referring to the three stages towards electronic payment in the following Figure 4.3, Indonesia is currently on Stage 1 - Bulk Payer Transition. In this stage, the bulk payers has decided to pay electronically (Ghosh, 2014) and there are various payment instruments and channels but the users are still limited (Dewi, 2014: 10).