Exclusive: Pontianak’s vision to become Indonesia’s FinTech capital

The Mayor of Pontianak believes the city’s future is to be “cashless”, and wants to beat other Indonesian cities to it. The central government asked cities across the country to boost mobile payments from next year.

“But we decided to start earlier,” Mayor Sutarmidji tells GovInsider. “We will make all the payments for parking and gas stations cashless,” he says.

Pontianak, a city of about 650,000 on the tropical island of Borneo, is named after the legend of ferocious ghosts that are said to have once roamed the coastal town. Its first Sultan got rid of them by shooting cannonballs and began building the city in the 18th century, the story goes.

Today, the city faces a very different kind of challenge. Mayor Sutarmidji shares his plans to make payments more convenient; cut air pollution from the yearly haze; and boost the city’s tech startups.

Indonesian AliPay?

In September, the city will launch a payment app, built along with a local startup, Gencil. The functions will be “similar to [China’s] AliPay”, Sutarmidji says, “but we will call it GencilPay”, allowing citizens to pay from their phones and without cards.

AliPay allows people to make a wide range of daily purchases by scanning a code on their phones, including bills, bus tickets, taxi rides and groceries.

Crucially, mobile payments may help address corruption by digitally verifying and tracking transactions. “It can be used to prevent the misuse of government money in corruption,” the Mayor believes. Already, in the city government, “we do not have any more cash transactions in making payments”, he says.

In the future, the city will “encourage all people to use bank transfers or GencilPay to do any kind of payment towards the government”, he explains.

Tackling haze

Residents of Pontianak face some of the worst air pollution in all of Southeast Asia from illegal forest fires on Borneo island. Sutarmidji wants to plant more trees to absorb carbon from the air and counter some of the effects. “You cannot cut trees without permission from the Mayor,” he says.

It is trialling a mapping tool in three areas of the city. So far, the city claims to have have mapped every tree along the city’s main street and recorded data on their age, height, weight, diameter and carbon absorption capacity.

The city uses this data to decide where trees should be planted, and also to calculate how much fine loggers should pay for illegally cutting trees in the city.

The city has built an app, Sippohon, to let officials track how polluted the air is in their area, and see the location of trees. Residents can also add their own data on trees in their neighbourhoods.

According to the Mayor, these tools will allow officials to calculate how many trees need to be planted in the city “to mitigate the carbon in that area so that the air quality will be in the safe zone”.

Working with startups

Pontianak “prefers collaborating with private sector and local startups” to build such digital services, rather than having an internal software development team.

The city launched a project in 2016 to allow startups to build government tech - the “Pontianak Digital Stream”. Pontianak’s internal IT department act as the “connectors between the government and local startups”, Sutarmidji says.

It identifies internal problems and matches them with startups through the Pontianak Digital Stream. The partnership with Gencil, the startup behind the payment service, is a result of this scheme. The startup has already built a complaints app for Pontianak.

“This is where citizens of Pontianak can report problems to the government”, the Mayor says. Similar to Jakarta’s Qlue, residents can take photos of issues they see, like fallen trees or garbage, send them to the government, and track their response.

An operations room called the “Pontianak Interactive Centre” routes these complaints to the right agency. Agencies have to respond within 24 hours, either by resolving the issue or at least providing an explanation.

The Mayor says he tracks the performance on his smartphone, and is “concerned about the speed of response”. A second area where the city is working with startups is on sharing government data with citizens.

Opening up data to the public will help businesses, and also encourage government agencies to share data with each other, the Mayor believes. Pontianak has published 785 datasets on Indonesia’s central open data website, compared to 318 from Jakarta.

The advantage of working on this with startups is that they can bring in lessons from other cities they have worked in, Sutarmidji believes.

“We can learn from other cities where some critical mistakes have been made in terms of running open data programmes”, he says.

Efficient government

Like many Indonesian cities, Pontianak is trying to cut bureaucracy. It has tried to simplify business permit applications by cutting 99 different types of permits down to 14.

Companies can also now apply for permits online, and do not need to come to an office to submit or collect documents. Permits are emailed and can be printed out when convenient.

“Information technology plays a very important role in speeding up the public services in Pontianak,” the Mayor says. The city can now process business permits and company registration certificates within a day, faster than the central government, according to a Jakarta Post report.

Mayor Sutarmidji claims Pontianak is the fastest in the country. Pontianak may be named after an urban legend, but its has now set its sights on becoming a hub for startups across the region and delivering the country’s best public services.

Image of Mayor Sutarmidji with Indonesian President Joko Widodo by Pontianak City Government