The pandemic is the perfect storm for the rise of Malaysian e-wallets

Nothing has been as disruptive as the Covid-19 pandemic.

As of this writing, over 1.5 million Covid-19 cases have been confirmed in more than 190 countries across the globe. Some 86,700 deaths have been attributed to the disease caused by SARS-CoV-2, and the outbreak has also placed billions of people on lockdown.

Photo credit: Jonas Leupe

Earlier in January, to encourage the use of e-wallets, the Malaysian government had partnered with three e-wallet providers to disburse 450 million Malaysian ringgit among 15 million eligible citizens. With the country currently under an extended lockdown, this move seems like a model for more government-led digital stimulus packages for keeping the economy afloat.

The current state of Malaysian e-wallet use

While Malaysian e-wallets have slipped under the radar recently, the underlying figures are robust.

The average value per transaction in e-money, for instance, has quietly breached the 10 ringgit ceiling, even reaching 11.69 ringgit in January 2020, based on the latest statistics from Bank Negara Malaysia (BNM).

This is a significant improvement, as the average transaction value had not passed 5 ringgit since 2005, the year the country’s central bank BNM liberalized its policies, allowing nonbanking institutions to issue e-money.

For the government’s current digital stimulus package, 47 e-wallet players threw their hats into the ring, but only three were chosen – GrabPay, Boost, and Touch ‘n Go – which could be a verdict on the industry’s winners.

E-wallets prevail with mobile commerce

Covid-19 has forced consumer behavior to change on a massive scale, and it’s causing a surge in digital consumption across the board – from mobile commerce and online food delivery services to digital content production.

Case in point: 1.3 million Malaysians tuned into the Lazada Birthday Carnival in March. There is also a sudden rise in new TikTok users in the country.

Since all nonessential stores are closed and many people opt to stay at home to avoid potential infection, mobile commerce and e-wallets have become frontrunners.

One digital payments player that’s reaping the benefits is TNG Digital, which has strong backing from China’s Ant Financial and CIMB Group.

With 10 million registered users – 50% of them active on its Touch ‘n Go e-wallet platform – TNG Digital is well-positioned through its strategic partnership with Lazada.

While desktop-driven internet banking is common, mobile commerce has undergone quick growth in recent years, and the outbreak could serve as a pivotal point for its rise. This is especially true in Malaysia, where the population is connected to mobile internet for approximately four hours a day, making it one of the top 10 countries in the world for mobile internet usage.

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