Malaysian digital wallets are bleeding money

This article summarizes an episode of Fintech Fireside Asia’s video series featuring Alan Ni, CEO of TNG Digital.

Alan Ni, CEO of TNG Digital /Photo credit: TNG

Processing digital payments can quickly bankrupt a company if it loses money on every transaction.

Alan Ni, CEO of TNG Digital, argues that digital wallets in Malaysia must establish a clear path to profitability.

While basic payments help build a base of verified users, true profit comes from guiding those active customers toward revenue-generating financial services.

Payments create a foundation for profit

Pushing extra services too early wastes money, but relying solely on transaction processing is a doomed strategy.

“If we do not diversify our business, more market share means more losses,” Ni says. “In the payments business in Malaysia, the unit economics are working against you. Every transaction, after costs, loses money. In that situation, market share does not solve the problem.”

In response, TNG shifted its focus. Basic payment processing dropped from 75% of the company’s revenue to less than half. Once the user base expanded, high-margin services like international transfers and business solutions became the primary earners.

This transforms business growth into a highly calculated process:

• Treat payments as a hook: Use basic transactions solely to attract and verify customers.
• Wait for scale: Delay aggressive monetization until a significant portion of the adult population uses the app.
• Demand daily engagement: Ignore passive sign-ups, as only highly active users buy new services.
• Pivot to high-margin products: Shift active users toward profitable actions like cross-border transfers and online shopping.
• Offset the baseline: Ensure these profitable services easily cover the losses generated by basic payment features.

Customer reach dictates financial success

A specialized financial startup might build an strong product, but customer acquisition costs will often drain its funding before the business can scale. Building a large, verified audience is a challenging requirement for survival.

“People underestimate the investment needed to acquire users at scale,” Ni warns. “You may have the best product in the world, but without distribution and without a user base, it is still very difficult to build a meaningful business out of it. Not many players have such deep pockets.”

This gives platforms like TNG a unique advantage because they can rent out their audience.

Instead of spending hundreds of millions of dollars trying to find their own customers, specialized providers and new digital banks can  partner with TNG to instantly access millions of verified, daily users.

Partnerships trade control for instant growth

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