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tate lenders Bank Mandiri and Bank Negara Indonesia (BNI) hope to cooperate with their merchant partners in the retail sector to reach higher electronic-commerce transactions this year supported by their new electronic payment platform.

Mandiri senior executive vice president for transaction banking Rico Usthavia Frans said on Monday that it expected the new platform to contribute to the Rp 81.1 trillion (US$6.92 billion) worth of transactions target generated from its electronic data capture (EDC) units in 2014.

It claims that the new platform, popularly known as mobile point of sales (mPOS) in the banking industry, will assist the partners or retailers to better manage their operations by attaching a dongle to their gadgets, such as a cell phone or tablet.

The dongle functions similarly to an EDC and is able to read data stored in both debit and credit cards.

'€œThe mPOS system will also allow merchants to oversee all their trading activities, from ordering to maintaining stocks,'€ Rico said.

The lender plans to gradually phase out the EDC currently used by its merchant partners and replace them with the dongles.

At present, Mandiri has around 250,000 EDC units and 150,000 merchants. It is looking to operate 10,000 dongles in the first year of the mPOS implementation and to see 8,000 and 9,000 of its existing merchants use the new device.

Rahmat Broto Triaji, Mandiri senior vice president for electronic banking, said that in the first phase, it would distribute the dongles to retail-focused merchants, especially in the food and beverage and insurance businesses.

'€œWe are also targeting the suppliers or distributors of our existing large-scale clients, such as those in cement or cigarette industries,'€ he said.

By using the dongle, Mandiri followed in the footsteps of BNI, its fellow state lender that launched its own dongle earlier in June.

At the time, BNI signed a partnership agreement with life insurer Equity Life Indonesia that would enable Equity'€™s agents to use the dongle for various payment activities with clients.

Following the first cooperation, the lender has now signed more partnership agreements with four other life insurance companies, according to BNI consumer product and retail division head Dodit Wiweko Probojakti.

He said that in the coming months, BNI would also establish partnerships with retailers to boost the use of the dongles.

'€œOur plan is to work with home appliance stores or restaurants that offer delivery service. That way, customers can make payments at home or at work,'€ Dodit added.

In 2014 alone, BNI is looking to operate up to 600 dongles. The figure is expected to climb to 1,000 next year.

Dodit said that dongle-based payment would hopefully boost its total debit and credit card transactions, so that fee-based income from the transactions could grow by 20 percent year-on-year.

According to BNI'€™s first-half report, its fee or non-interest income stood at Rp 4.8 trillion by the end of June. Card business made up for 16 percent of the fee figure.