You’re walking about the Kuching Food Festival, getting food and delicacies at the surrounding stalls. You make your way to the cashier – but you don’t have any cash on hand!
Instead, you pull out your phone, click on an app, scan the QR code by the cashier counter, press a few more buttons – and poof! You’re done and on your way to feast.
Such is the ease of life thanks to electronic wallets, or e-wallets as they come by – a trend gaining traction in Malaysia as companies try to gain a competitive edge in this unique subsegment of financial technology while consumers grow more tech-savvy.
The use of e-wallets has the potential to benefit all segments of society, especially people who do not have a bank account as well as businesses – both big and small – from roadside stalls to hypermarkets and more.
For businesses, a cashless environment eliminates costs and risks of storing cash and payment bottlenecks in the supply chain.
This is likely the reason why a boom in e-wallets happened in the country within the past few years.
Mainland China is perhaps the global tech leader taking the e-wallet industry to the next level, with its two leading giants – AliPay and Wechat Pay – said to have also reached Malaysian shores.
Singapore-based Grab rolled-out its digital payments service GrabPay to third-party merchants in November last year, making QR code payments available in hawker centers and restaurants throughout the city-state.
An update is that GrabPay will be rolled into Grab Financial, its new service offering loans and insurance products to the firm’s drivers, online-to-offline agents, and merchants.
AMMB Holdings Bhd (AmBank Group) is expected to launch an e-wallet payment platform next month in cooperation with one of the largest telecommunication (telco) companies in the country, according to group chief executive officer Datuk Sulaiman Mohd Tahir who said the e-wallet would enable the telco’s subscribers to make payments at more than 50,000 existing merchants.
“An announcement on this will be made in the next month or so,” he told a press conference after the company’s annual general meeting earlier this week.
This was in addition to all telecommunication players – Celcom Axiata Bhd, Maxis Bhd and Digi.com Bhd – as well as a variety of key industry players such as AirAsia Bhd (AirAsia), Samsung Malaysia and even Lazada Malaysia offering its own version of an e-wallet.
Even Sarawak joins the fray with its very own Sarawak Pay app, initially designed to ease the process of bill payments but now expanded to offer much more.
Adoption of electronic payments is encouraging, according to Bank Negara Malaysia’s Annual Report 2017 released earlier this year, as the number of e-payment transactions per capita has more than doubled to 111.
This comes as the volume of cheques declined by 41.9 per cent to 119 million or four cheques per capita.
Meanwhile, the number of point-of-sale terminals has expanded rapidly and the volume of debit card transactions increased by more than six times to 162.3 million transactions or 5.1 transactions per capita.
The central bank said a major milestone in 2017 was the smooth transition from signature to the more secure PIN-based payment cards on July 1, 2017, which was achieved without disruptions to payment transactions.
“In 2018, the bank will focus on initiatives to promote mobile payments to complement debit cards in displacing cash.
“An area of primary focus will be the operationalisation of the Interoperable Credit Transfer Framework (ICTF).
“By ensuring fair and open access to a shared payment infrastructure by banks and non-banks, the ICTF is envisioned to drive greater competition, spur the development of innovative payment services to cater to the needs of different customer segments, and foster greater financial inclusion.”
Maxis’ head of consumer business Dushyan Vaithiyanathan said the proliferation of smartphones and an accelerating data usage are encouraging a shift in purchasing behaviour towards more transactions via mobile.
“The government’s push for a cashless ecosystem further amplifies the growing importance of digital payments or e-wallets as the inevitable future of commerce,” he said to BizHive Weekly in an interview.
“However, we see some challenges in mass adoption, which is triggered by a number of things. One of them is a sizeable underserved market – those without bank accounts – who have very little means of participating in today’s digital commerce.
“We do see a lot of potential in this space, which is why we have been building micro-offerings that are tailored for this segment, predominately within in our prepaid customer base, to help them play a more active role in mobile commerce.”
For an ewallet to serve its purpose, Dushyan said the entire ecosystem needs to be interoperable and seamless.
Otherwise, “it is nothing more than an enabler or technology platform,” he said.
This is why we need partnerships to establish the many components that will ensure an effective and successful ecosystem,” he added.
“As I’ve mentioned, there is little to no interoperability for e-wallets due to the relatively new mobile payments industry. Merchant acquisition is getting more challenging, and also user trends still point towards cash or a high dependency on credit cards.
“There are factors that will enable this interoperable ecosystem, and eventually lead to greater acceptance and adoption of e-wallets.
“One of them is security, which ultimately leads to a higher level of trust by the consumer that is needed to influence greater adoption.”
Sarawak leads the pack with Sarawak Pay
With even the Sarawak state government throwing their hat into the ring with Sarawak Pay, it seems that everyone wants a piece of the ewallet pie.
Launched by Chief Minister Datuk Patinggi Abang Johari Tun Openg, the Sarawak Pay e-Wallet is the first of its kind implemented by the Sarawak government, which is also the first among other states in Malaysia to have undertaken this system.
Licensed and governed by Bank Negara Malaysia (BNM),The Sarawak Pay’s ‘Scan & Pay’ feature allows each payment to be initiated by scanning the QR code on a biller’s slip, or scanning the code displayed by the merchants.
The app, available for download via Apple Store and Google Play, is a cashless mobile payment solution implemented by the state government to empower the state’s digital economy agenda. It represents a big step towards digitalising Sarawak economy.
This makes Sarawak the first state government in the country to implement the e-Wallet system, which is licensed under PaymentGalaxy Wallet and governed by Bank Negara Malaysia (BNM).
Sarawak Pay version 2.0 targets to increase the number of registered merchants from 100 at present to 10,000 by the end of this year.
According to Sarawak Multimedia Authority (SMA) general manager Dr Zaidi Razak, the authority is in the midst of discussion with foreign entities to pave the way for Sarawak Pay to go abroad.
“We have the vision of going international, which is why we have started an MoU (memorandum of understanding) with Singapore.
“We are also in discussion with operators of GrabPay and WeChat Pay. We will move beyond Sarawak to Semenanjung, and Indonesia is also a partner in discussion with us,” he said during a briefing on Sarawak Pay e-Wallet earlier last month.
Zaidi assured Sarawakians that SMA has looked into all aspects of security features to ensure the app is safe and convenient to use.
He added personal details made available to Sarawak Pay during registration are well protected under the existing laws and regulations.
“We are regulated by the PDPA, which is the Personal Data Protection Act, and governed by Bank Negara Malaysia (BNM),” he said.
Sarawak Pay version 2.0 also validates the user name and MyKad number during registration.SMA offers 10 pct cash rewards to merchants for transactions made using Sarawak Pay.
To entice more merchants to take up this venture, SMA is offering registered merchants 10 per cent cash rewards for every single collection transacted via Sarawak Pay.
“At the moment, we are providing incentives for merchants and users to join and utilise Sarawak Pay. We want many Sarawakians benefit from this initiative by SMA towards a cashless lifestyle,” he said.
Zaidi said there is no limit on the transacted amount made via Sarawak Pay per day, but SMA is offering up to RM1,000 worth of cash rewards on a monthly basis.
He said the authority is committed to helping the local commerce industry adapt to and adopt the digital and cashless way of doing business.
He added that such cashless services are offered free of charge by the Sarawak government, with the ultimate aim of benefitting the business community as well as consumers at large.
He also believed that using Sarawak Pay to trade and transact would help lower the cost of doing business in the long run.
Boost: The chase for more merchants
Boost, a homegrown e-wallet app developed by Axiata Digital Services Sdn Bhd, last week announced its partnership with global payment brand, UnionPay International, to grow its footprint in Malaysia and overseas.
Boost chief executive officer Christopher Tiffin said the partnership aims to enable users to use the app to leverage on UnionPay’s offerings to transact globally and likewise, for tourists to transact in Malaysia.
On top of that, Boost and UnionPay will be jointly ramping up their marketing efforts in promoting their services and further quicken their education and expansion plans.
“As UnionPay International is one of the leading international payment brands in the world, this partnership allows us to create relevance to merchants and customers both inside and outside Malaysia, by leveraging UnionPay’s international presence.
“This is another milestone in broadening Boost’s functionality and usability to provide a more rewarding experience for our partners and customers,” he said at the signing of a memorandum of understanding (MoU) on the partnership.
As one of the fastest growing global payment brand in the world, UnionPay serves the world’s largest card base of over 7 billion. Having formed partnerships with more than 1,800 institutions worldwide, UnionPay has enabled card acceptance in 170 countries and regions globally with issuance in 48 countries and regions.
Providing high quality, cost effective and secure cross-border payment services to the world’s largest cardholder base, UnionPay ensures convenient local services to a growing number of global UnionPay Cardholders and merchants.
Currently, there are over 7.5 million UnionPay QR Code (QRC) merchants globally, with UnionPay International announcing in May 2018 a massive roll out of EMV-compliant QRC terminals across different industries all over Malaysia.
Officially launched in 2017, Boost allows users to pay via their mobile phone at participating locations without the hassle of using physical cash or cards. Some 2.7 million Boost users can pay at more than 30,000 touchpoints nationwide.
“As part of the partnership, our long term plans are to enable users to use the app to leverage on UnionPay’s offerings to transact globally and likewise, for tourists to transact in Malaysia,” he added.
“On top of that, Boost and UnionPay will be jointly ramping up its marketing efforts in order to promote our services and further quicken our education and expansion plans.”
Boost is a homegrown mobile lifestyle wallet that aims to revolutionise the way consumers transact on a daily basis. Combining lifestyle needs and cutting edge digital technology, Boost strives to make transactions easier, faster, more secure & overall a more rewarding experience for consumers.
Boost officially launched in January 2017 as a platform that digitised one of the telco’s core services – the way prepaid users top up their mobile credit. Boost allows users to pay via their mobile phone at participating locations without the hassle of using physical cash or cards. 2.7 million Boost users can now pay at more than 30,000 touchpoints nationwide.
Closer to home, Boost is growing its presence in East Malaysia. In March this year, tHe Spring Shopping Mall became the first mall in Kuching to go cashless where shoppers will be able to enjoy a seamless payment experience by using Boost.
Telcos: Focus on giving back to consumers
For players in the telecommunications industry, adding ewallets on to its businesses was a natural move as it meant being able to expand its offerings to its consumers both existing and new.
According to Maxis’ head of consumer business Dushyan Vaithiyanathan, its customers are using more data than ever before – approximately 9GB a month today.
“As a telco, we are in a position to facilitate digital and micro payments as we are the natural first port of call for digital content service But beyond this, we have the billing relationship with our customers, and are constantly improving ways to make this experience seamless and hassle-free,” he said to BizHive Weeklky.
“This is why we are focused on building awareness for our Direct Carrier Billing (DCB) on acceptance and adoption first. In fact, Maxis was the first to enable DCB on Netflix, while users of Google PlayStore or Apple Store can also directly pay to their bill using our DCB.
“This is an important process for eWallets to reach a more mature stage.
DCB or Direct-To-Bill is one such initiative that is growing in prominence and adoption, where a user can easily pay for digital content with their monthly bill, instead of the hassle of whipping out a credit card or toggling a small window to manage an FPX transaction order while experiencing a tedious customer journey of user registration.
“All of these can be alleviated with Maxis’ Digital ID/Single Sign-On as an interoperable, accepted authentication and Maxis Pay as a direct-to-bill payment provision,” he added.
Meanwhile, for Digi, its chief digital officer Praveen Rajan told BizHive Weekly that the group began with an aim to offer Malaysian consumers and merchants a simpler, more elegant, more progressive, risk-free payment solution.
“We leveraged on Telenor’s existing investment in Valyou Sdn Bhd, an e-money issuer authorised by BNM to offer a new cashless payment experience for Malaysians,” he said.
There is currently more than RM85.5 billion cash in circulation, and an early aspiration for vcash was to convert cash-based transactions into digital.
In a study by BNM, the total costs incurred by the banking industry, the business community and BNM in cash handling and management was estimated at around RM4.8 billion in 2012.
“Cash is our competition. Cash may be king for now, but there is a cost to handle it: count, store, transport and then bank.
“Vcash is the easiest eWallet to enable mobile payments for users and merchants. It is available for all Malaysians regardless of telco provider and simplifies the act of transacting online without a credit or debit card for more Malaysians while also enabling more merchants to accept cashless payments in the offline world.
“Our focus now is to look at communities where an ewallet solution would bring about the most benefit such as universities and offices and to also look at the surrounding environment.”
Praveen said this ewallet venture ties in with Digi’s ambition to be the digital transformation expert for SMEs and small businesses. vcash complements our suite of existing end-to-end solutions for SMEs who wish to start their digital transformation journey.
“This includes fleet tracking solution iFleet, order management and sales system iJual, wireless payment terminals and high speed internet connectivity,” he added.
“People are still very comfortable using cash. However what they do not realise is that cash is cumbersome, risky and costly. Cash may be king for now, but there is a cost to handle it: count, store, transport and then bank.”
A key priority, Praveen said, is to continue educating the public on the benefit of using an eWallet versus cash.
“The industry as a whole needs to continue building awareness on mobile payments to drive behaviour change and the willingness to go cashless. It will take time and persistence. If we take a look at the e-commerce market, it took about five to seven years before it reached a point of mass adoption in other developed markets.
BigPay: Riding on AirAsia’s digital strategy
When an organisation as big and ambitious as AirAsia joins the fray, you know you’re hot on the heels of the latest tech trend.
Thus, when founder Tan Sri Tony Fernandes officially unveiled BigPay at the Money 2020 conference in Singapore on March 15 this year, all eyes were on the app.
During the event, Fernandes said the driving factor behind AirAsia’s move into fintech was a realization that it could monetize the wealth of “high resolution data” it has collected from around 63 million passengers over its 16 years of operation.
Developing an in-house digital payments platform would also help AirAsia take a lead on competing airlines by moving towards a “cashless cabin,” he said.
Today, the BigPay card allows you to pay anywhere in the world as opposed to other e-wallets which can only be used at select merchants.
“We don’t identify as an e-wallet, as we think we have much more functionality than the other e-wallets out there,” explained BigPay’s chief executive officer Christopher Davison in an interview.
“You can also send money to your friends that have BigPay – for free. We’re passionate about bringing both freedom and value to our customers, and the combination of both a card and a mobile money app is the perfect bridge.
“Our goal is not to give people temporary and gimmicky discounts, but to empower Malaysians – and eventually the whole of Asean – with sustainable, fair and transparent financial services.
“This includes getting rid of those high markup fees that are traditionally applied when spending abroad.”
In speaking to BizHive Weekly, Davison said he hopes to replicate AirAsia’s revolutionary travel disruptive strategies within financial services.
“AirAsia has revolutionised travel in South East Asia. From a home grown Malaysian brand it has now become one of the largest airlines in the world. As AirAsia changed the travel industry, BigPay is disrupting and democratising financial services.
“BigPay is about offering great value for money, a cutting edge product and excellent service. We believe everyone should have access to essential financial services – it shouldn’t cost you an arm and leg to pay for things while your on holiday.
“We’ve combined a beautifully designed app and a payment card with much lower fees than your bank, especially when you spend abroad. We’ve had a fantastic response and uptake in the first 6 months since launch – more great things to come!”
A unique feature offered by BigPay is the ability to see the exact exchange rate it is giving – and the group plans to continue adding more features to the e-wallet.
“We’ve just added an easy way to split bills between friends and also requesting money from friends,” he enthused. “We’re constantly working on improving our user interface and the spending analytics.
“Everything should be intuitive, fast, easy to use and easy to understand. We really want to create ways that that people can budget better and save money for a rainy day or that dream vacation.
“We’re very community focussed and take all feedback and suggestions from our users to build the best product we can.
“In the medium term, we plan to expand into providing the best value remittances and credit facilities available in the market. There’s so much to do, it’s exciting.”
When asked about future merchant opportunities, the CEO had this to say: “We have a lot of exciting partnerships coming, including with well know brands present within East Malaysia. Sabah and Sarawak is one of our main priorities for growth.
“We frequently have exclusive discounts with AirAsia, as well as zero processing fees, earning AirAsia Loyalty Points and many other benefits. When it comes to any services, you have the right to ask for more. More information, better support, less fees, transparency . Don’t feel content with what you’ve been used to, especially when it comes to money. Your choice is your power. Be more in charge!”