GoTo, TikTok to launch ‘buy now, pay later’ service in Indonesia

INDONESIAN tech company GoTo is gearing up to launch a “buy now, pay later” (BNPL) product with TikTok, months after it struck a high-profile e-commerce deal with the wildly popular social media platform.

GoTo is doubling down on financial services to drive topline growth as it seeks to convince investors of its long-term earnings potential.

The group’s fintech unit recently snagged David Chen, the co-founder and former chief executive of BNPL platform Atome. Chen now heads GoTo’s consumer lending and BNPL business.

In an earnings call upon the release of GoTo’s fourth-quarter results on Tuesday (Mar 19), GoTo Financial head Thomas Husted said that BNPL has shown promising growth prospects.

“Our goal and our aim is that GoTo Financial ends up as the most preferred partner with both TikTok Shop as well as Tokopedia’s platform,” said Husted, who is the fintech unit’s president. (*see amendment note)

Companies such as Akulaku and Kredivo also run BNPL services in Indonesia.

Last December, GoTo agreed to cede operational control of Tokopedia in a bid to halt the platform’s rapid loss of market share in Indonesia.

GoTo struck a deal with ByteDance’s TikTok, under which TikTok will invest over US$1.5 billion in a joint venture that it will control, without additional dilution to GoTo.

In exchange, GoTo is expected to gain a steady revenue stream.

Husted said that GoTo is focused on product integrations with TikTok Shop, though the priority lies in ensuring compliance with the regulations set out by Indonesia’s Ministry of Trade.

Financial services, though a slice of GoTo’s overall revenue, is expected to be a significant driver of the group’s growth.

In the fourth quarter, gross revenue from the financial technology business rose 26 per cent to 605 billion rupiah (S$51.6 million).

GoTo’s consumer lending business, comprising its BNPL and cash-loan offerings, grew by 32 per cent quarter on quarter to 1.9 trillion rupiah after having previously grown by 44 per cent.

GoTo’s payments app GoPay has been attracting “a large number of users that are coming in unsolicited” to apply for cash loans, Husted added.

“That’s something we are going to work on quite intensively over the next few months,” he noted.

GoTo Financial is also working with BFI Finance on providing vehicle financing to drivers. The pilot project is being done on a non-exclusive basis, and is subject to regulatory approval.

*Amendment note: Due to a source error, an earlier version of this article stated that Thomas Husted is chief operating officer of GoTo. Husted left the role in February; the article has been amended.