Lazada-backed TNG Digital struggles to meet its potential

Welcome to The Top Up! Delivered every Wednesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. Get it in your email inbox by registering here.

Hello there,

In the early days of Indonesia’s digital payments scene, I – like many others – extensively used GoPay, Ovo, and Dana for food deliveries and other online transactions.

Offline payments, though, were a different story. Unless the cashbacks were particularly mouth-watering, my immediate instinct had always been to take out my trusty BCA debit card – something I didn’t have to continually top up.

But then my behavior changed in late 2019, when Bank Indonesia launched its nationwide QRIS system, which lets consumers pay with any e-wallet through one unified QR code. I found myself paying for offline payments both with e-wallets as well as through BCA’s mobile banking app much more frequently.

A similar thing happened in Malaysia. As my colleague Emmanuel writes in this week’s Big Story, the state-linked TNG Digital e-wallet has struggled to turn a profit despite being one of Malaysia’s top four players. Part of that reason is due to a national QR code system that has eroded the revenue streams of e-wallet operators in the country.

But that has turned out to be just one of TNG Digital’s many problems. Despite its links to Touch ‘n Go, CIMB Bank, Ant Group, and Lazada, bureaucratic influence and a mismatch of priorities between the e-wallet and its parent firm have become a key issue, insiders tell Tech in Asia.

In this week’s Hot Take, I also take a look at a seemingly burgeoning trend among fintech startups: debt financing. It’s an attractive option for founders in the current macro environment, but does its benefits outweigh the risks?

– Putra

THE BIG STORY

Making sense of TNG Digital and Lazada’s hefty investment in the firm

Image credit: Timmy Loen

The Malaysian company’s parent firm may have a monopoly over key public services, but a staid bureaucracy stands in the way.

THE HOT TAKE

Move aside equity financing, venture debt is coming in hot

NEWS YOU SHOULD KNOW