TNG Digital: Education, awareness current focus of e-wallet sector

By Xavier Kong

CONSUMERS are spoilt for choice when it comes to the service providers for cashless payments. But they may be inundated with more than 20 active e-wallet players in Malaysia.

At the time of writing, a total of 49 e-money licences had been issued by Bank Negara Malaysia, of which only five have gone to traditional banking players.

However, TNG Digital Sdn Bhd CEO Ignatius Ong believes the proliferation of e-wallet players in the sector is good as the multitude of players will help to educate the market.

“I think having a couple more e-wallet providers at this point in time is good for the industry – it is good for the market. One thing is that you have a couple of players trying to educate the market about what it means, going cashless. So it’s not just reliant on our shoulders as TNG Digital, but I think we leverage off each other in getting the point across to the Malaysian public,” Ong tells FocusM.

He shares that this gets excitement and conversations going among the people, when the questions are raised and discussions are had about whether a certain place accepts e-wallet payments, and which e-wallets are accepted, and the people get more savvy about e-wallet use with each conversation.

These conversations are also not limited to the face-to-face variety, as they are also being carried out online through social media platforms, with Ong naming a Facebook group that has daily discussions about the pros and cons of certain e-wallets, and how they compare to others, as well as the “touchpoints” (e-wallet-friendly points) available for each e-wallet.

Moving forward, however, he believes that, should there be so many players, it will likely develop into a case where users have certain e-wallets for certain uses, and this is “ridiculous”, according to Ong.

“As a user, how many e-wallets do you really want to have? The more e-wallets you have, the more e-wallets you have to actually fund, and that is ridiculous. It will come to a point that you will have certain wallets for certain specific use cases,” said Ong.

Instead, he believes there should be only one e-wallet that can be used for everything, where whatever money you add to it is usable anywhere. “It is basically like your actual, physical wallet, but on a cashless basis, that can cater to every touchpoint you go through,” he explains.

Will there be a consolidation of e-wallet players?

When asked about the e-wallet sector past the education and user acquisition stage, and when he expects that phase to be, Ong points towards China as an example, citing that the nation of about 1.4 billion people where the e-wallet usage started uses only two e-wallets, namely Alipay and WeChat Pay.

“How do these two wallets sustain themselves in the Chinese market? They are big enough, with very high acceptance by the Chinese people, and the two brands are trusted by the people as well. The confidence level you have with the brand speaks a lot, and the same goes for Malaysia as well,” said Ong.

“In the long term, if a population of 1.4 billion only needs two e-wallets, what does Malaysia require?” he added.

It was also shared that AliPay has been moving towards becoming an internationally recognised and used e-wallet, and that TNG Digital is part of that network, considering one of the company’s backers is Ant Financial, which also provides the systems for AliPay.

Ong also addresses the question of why TNG Digital did not take the first mover advantage in terms of starting up an e-wallet in Malaysia. He notes that China, which saw the start of the e-wallet, is markedly different from Malaysia.

“To be frank, Malaysians are privileged. We have gone through the era of credit cards and transit cards. In China, chances are that the random person on the street does not have a credit card. So there is a compelling need for them to start thinking about how they can use money both inside and outside the country, as carrying bags of cash is just not relevant,” explains Ong.

Malaysians, on the other hand, ask the question: “Why do I need an e-wallet when I have credit or debit cards?” At the same time, Ong also shares that 90% of transactions in Malaysia are still conducted in cash.

“It is at these touchpoints that do not accept card payment, the mamak shops, wet markets, food trucks and roadside stalls – these are the places we want to be at,” says Ong, adding that Malaysia will move towards becoming a cashless society when about 70% of transactions are conducted in a cashless manner.

e-Tunai Rakyat and its impact on users

Jan 15 this year saw the launch of the e-Tunai Rakyat programme, where the government has allocated RM450 mil for the purpose of getting Malaysians to be more comfortable with performing cashless transactions with e-wallets.

National sovereign wealth fund Khazanah Nasional Bhd was tasked with this, and TNG Digital, Boost and GrabPay were announced as the e-wallet partner vendors for this initial test phase of the programme, which will end on March 14.

The RM30 one-off digital stimulus can be claimed by Malaysians over the age of 18 and earning less than RM100,000 annually.

As of Jan 17, 48 hours into the programme, RM18.8 mil of the allocation has already been spent by Malaysians, which is an encouraging sign of e-wallet use. – Feb 7, 2020

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