Otherwise, they’re “just a cash-burning exercise,” said Eddi Danusaputro, chief executive officer of PT Mandiri Capital Indonesia.

The race for customers in Indonesia is so intensive that e-payment providers have been willing to offer steep enticement discounts, calculating that the immediate cash hit is worth it in order to secure a bigger market share, said the CEO in an interview.

In Jakarta, services like Gojek’s GoPay and Grab Holdings Inc-backed Ovo have been dealing out purchase discounts and cashback as high as 50% and sometimes even 90%, none of which is sustainable in the eyes of the Mandiri Capital CEO, which has itself invested in LinkAja, another competitor in this crowded field.

“Nobody makes money from e-wallets,” Danusaputro said. Seller fees are “coming down, gone are the days of 2% or 3%. The banks are making money from the funding side and savings or checking accounts of the merchants.”

For them to survive, e-wallet services have to direct users to more profitable ventures, said the CEO, such as by cross-selling financial service products like mutual funds, stocks or insurance products.

Mandiri Capital said that LinkAja’s alternative e-payments approach is to pursue fees from various public-utility transactions such as toll roads, train tickets and health-care payments – all areas where the competition is less intense.

Formed four years ago, Mandiri Capital now manages US$100 million of funds, invested mostly in 13 startups.

The venture capital firm will set aside 90 billion rupiah  next year for new investments and follow-up funding.

It has recorded unrealised gains of nearly 300% since its inception.