As Digitalization Grows, Will Indonesia’s Agent Networks Survive?

Indonesia is Southeast Asia’s largest digital economy, poised to reach $180 to $340 billion by 2030—by all measures a success story of rapid digital growth. Yet, even as digital transactions surge, Indonesia’s vast informal sector holds on to cash as a central aspect of daily life. Despite the expansion of digital payments, cash in circulation has more than doubled over the past decade to reach approximately $65 billion as of July 2025. 

Agents move between the digital and cash economies

At the heart of this coexistence are millions of local agents who make the digital economy work for everyone. Many of them are small business owners who operate from kiosks and local shops called warungs, serving as trusted financial intermediaries that connect communities to banks, payments and other digital products that would otherwise remain out of reach. 

As the number of bank branches and ATMs in the country has declined by 25% over the past five years, the number of agents has grown by about 40% annually over the past decade, according to MSC estimates. By 2025, there were more than 2 million registered agents nationwide. While only about one-third of agents remain consistently active, they form a cornerstone of Indonesia’s financial inclusion efforts, serving as the primary channel for FSPs to reach last-mile communities. 

Global Findex 2025 data shows that only 30% of Indonesian adults conduct payments independently through self-service channels, such as mobile applications, cards or online platforms, indicating that most people still depend on assisted channels for financial transactions. This continued reliance is reflected in agents’ growing activity, as transaction values continue to increase. Between 2017 and 2023, cash-out transactions rose by 43% and the average transaction volume through agents grew five-fold. 

However, as Indonesia’s digital economy grows, individual access to digital channels continues to deepen. Cellphones now reach 68% of the population, and 72% have internet access. Cashless transactions, particularly through Indonesia’s interoperable QR code payment system (QRIS), have been growing at a rate of more than 150% year-on-year. As more people begin to transact independently through mobile and internet banking, a critical question emerges: will agents remain relevant? 

How are agents faring in other digital economies? 

Globally, digital growth has yet to replace cash, and agents keep the two worlds connected. We see this even in the world’s largest and fastest-growing digital payment ecosystems, such as India and Kenya. 

In Kenya, one of the global pioneers of mobile money, cash in circulation continued to climb by $2.6 billion in 2024, a 5.6% increase from the previous year. Meanwhile, agents facilitated mobile money transactions worth $67.3 billion in 2024, nearly double the level recorded in 2019. 

In India, the Unified Payments Interface (UPI) - a real-time platform that enables instant fund transfers between bank accounts – has driven a surge in digital payments. UPI transaction volumes increased tenfold in just four years, from 12.5 billion in 2020 to 131 billion in 2024, to account for nearly 80% of all digital payments. At the same time, cash in circulation has more than doubled from $200 billion in November 2016 to reach $418 billion by September 2024, with SBI, India’s largest bank, channeling approximately 3.2 million transactions per day through its agent network. 

These examples reveal that even in highly digitalized markets, assisted channels remain essential, suggesting that digital and agent ecosystems will coexist for years to come. 

Agents in Indonesia adapt to a dual cash-digital system

Indonesia mirrors this global reality. The strength of its agent model lies in its adaptability to a dual cash-digital system. What began as a simple cash-in, cash-out function has gradually expanded in scope. While not all agents can offer advanced services, many have started to diversify and now sell digital products, offer loans and microinsurance, facilitate QRIS payments, and even serve as delivery or return points for e-commerce.

Traditionally, agents have been vital to enable government-to-person (G2P) transfers and ensure cash reaches low-income households efficiently. Building on this foundation, many agents are now becoming the frontline for financial service providers (FSPs) to deliver more specialized financial products, such as microloans, savings, and climate-risk insurance, helping strengthen rural economies and household resilience.

Agents’ adaptability has built both structural and economic resilience. Agents are not competing with Indonesia’s rapid digitalization; they are powering it. Rather than being displaced by fintechs and mobile banking apps, they form the human infrastructure that makes digital services accessible and trustworthy, especially in areas where cash use is prevalent and digital literacy is low. 

Agents remain the bridge between digital systems and communities

The shift toward digital finance in Indonesia is well underway, but agents will remain the critical bridge that connects digital systems to communities. As the ecosystem matures, stakeholders in the ecosystem should now shift their focus from expanding agent coverage to strengthening their capabilities, which would enable them to manage more complex, higher-value transactions and provide greater value to customers. 

Providers can support this evolution if they invest in advanced training, streamlined business processes, and data-driven, AI-enabled, tools for effective agent management. Even as technology transforms financial services, the human presence and local trust that agents bring will remain essential to ensuring that Indonesia’s digital finance is both inclusive and scalable. The future of finance is digital, anchored by the agents and their customers who make it work.