E-wallet blooms despite security concerns

Most financial institutions are working on systems to migrate to e-payments progressively


THE country’s e-money market has bloomed steadily over the past few years, with an increasing number of people utilising their mobile phones as digital wallets.

Mobile payments have significantly reduced the usage of cash, and most financial institutions are working on a variety of systems to migrate to e-payments progressively.

According to statistics from Bank Negara Malaysia (BNM), the e-money market had opened with a sizeable amount of RM1 billion in value and 365.6 million in volume starting from 2005.

Going forward, the value of transactions increased to RM2.8 billion, while the volume recorded a hike of 803.3 million as of 2011.

The market had grown exponentially as of 2018, reaching RM11 billion in value and 1.92 billion in volume.

This year, the e-money market noted a value of RM4.8 billion and 652.8 million for its volume of transactions as of April 2019, according to BNM.

Among the forerunners in the e-commerce space is TNG Digital Sdn Bhd, via its two unique e-wallet features — RFID and PayDirect — dedicated for toll payments.

The company is currently leading the e-wallet space with the Touch ‘n Go eWallet, and sees its role as champio- ning urban mobility.

“This (e-wallet) has allowed us to differentiate ourselves from our competitors and give our users a strong value proposition in terms of on-the-road experiences,” TNG Digital CEO Syahrunizam Samsudin (picture) told The Malaysian Reserve.

He said his team is constantly engaging with small and medium enterprises, local mom-and-pop shops and business owners within and outside of the Klang Valley to educate, inspire and engage with potential users and partners.

“We have a lot of exciting projects and updates in the pipelines, and the e-financial segment is one of them.

“To date, we have over 4.3 million Touch ‘n Go eWallet users and close to 70,000 merchants, which is a huge accomplishment for us just within one year of operations. “With this, we are well on our way to become one of the biggest e-wallet players in Malaysia,” he said.

In spite of the growing amount of transactions, the e-wallet adoption in Malaysia is said to be still at its early stage, as security concerns continue to sprout among users.

Based on the Nielsen Payment Landscape Report, the primary method of Malaysians using the cashless payment is through debit card and online banking, at 63% and 57% respectively.

The report pointed out that a mere 8% of the population uses mobile wallets as their payment method, as 46% of non-users cited security concerns as the main reason for not adopting e-wallet.

Nielsen’s consumer insights leader for east zone MD Arslan Ashraf said in terms of security, people are mainly concerned that their private information will be stolen.

“However, this is not peculiar to Malaysia, because when we did a research in China four years ago, security was the biggest concern there too.

“Therefore, it is very important that we address the concern by pushing and inducing the trial.

“Once we have addressed the security concerns in the e-wallet space, the next most important thing to look into is the convenience and customer experience,” he said in a panel discussion at a forum in Kuala Lumpur recently.

According to TNG Digital chief risk officer Teh Huey Tzi, most of the scams that have happened on the company’s platform were from their customers’ negligence.

In most cases, the customers had leaked out their one-time-password pins to scammers, she said.

“So, these are the things that go hand in hand with education and knowledge, and how we handle the situation on a personal scale itself.

“Apart from the multi-factor authentication process, our back-end system also applies artificial intelligence that works to detect and mitigate any unauthorised activities,” she said in the forum organised by TNG Digital.

Teh added that their team is working on easing the transition in adopting and embracing a fully digital lifestyle by removing users’ doubts on security when they transact using e-wallet.

Based on BNM’s report last year, 40 e-money issuers — banks and non-banks — are already in the market.

BNM targets to increase the number of e-payment transactions per capita from 44 transactions to 200 transactions in the next 10 years.