RM450m enters the ‘e-Wallet’ world for Malaysians

by PRIYA VASU & S BIRRUNTHA/ pic by MUHD AMIN NAHARUL

THE government had selected Touch ‘n Go eWallet, Boost and GrabPay as operators of its RM450 million e-Tunai Rakyat Initiative, a programme which would see cash flooded into the e-Wallet sphere to millions of users.

“The three e-Wallet players are among Malaysia’s largest and collectively provide a ready platform for the rollout of the e-Tunai Rakyat initiative, which is scheduled to be launched on Jan 15, 2020,” Khazanah Nasional Bhd said last week.

The state-owned fund said the participating e-Wallet service providers were selected based on several criteria, including having large numbers of active users, large merchant networks, technical expertise, financial strength and human resources to build the necessary systems and the ability to handle a large number of transactions in a short time.

The announcement came after the Ministry of Finance said the people’s e-Wallet or e-Tunai Rakyat is set to be implemented next month.

During Budget 2020 presentation last October, Lim Guan Eng (picture) announced RM450 million digital stimulus to accelerate the use and adoption of e-Wallets and digital payments among Malaysians.

Khazanah is the facilitator of the rollout of the e-Tunai Rakyat initiative, which involves close collaboration with various parties including the National Registration Department and the Inland Revenue Board.

“The overall implementation work facilitated by Khazanah is a comprehensive effort to ensure that the e-Tunai Rakyat initiative is delivered within the timeframe that provides a satisfactory and secure user experience,” Lim was reported as saying.

iMoney co-founder and ED Lee Ching Wei also said the allocation could be given based on user preference and user base, on top of sustainability for each platform’s ecosystem.

“For example, while GrabPay won the Best e-Wallet for the Malaysian e-Payments Excellence Awards 2019, there might still be users who prefer Boost or Touch ‘n Go e-Wallet for the experience or integration to their daily lives.

“For this reason, we expect the government to give a universal redemption code that works for all e-Wallets, as this will help drive a healthy competition in the industry,” Lee told The Malaysian Reserve.

“This will also empower users to choose the e-Wallet that best suit their needs.”

He also added that if the government awards the tender to only a single provider, it will mean a potential loss of market share for the unselected platforms.

“As RM450 million translates to 15 million users, which is a substantial market share, I believe it is a significant portion of which are new leads and costly to attain,” he said.

The proliferation of e-Wallet in recent years has crowded the digital payment landscape in Malaysia.

According to Bank Negara Malaysia (BNM), there are 42 nonbank e-money issuers in the country registered with the regulator.

The abstract concept that money stores value, is a similar concept applied to the e-Wallet platform.

Although a significant difference on how consumers pay for goods and services varies, digital wallets have faded the appeal for crumpled paper bills. It is even worth noting that e-payment transaction volume exceeded cash circulation.

Based on electronic payments volume and value of transactions data by BNM, a staggering RM2.8 billion e-money had been transacted for the first 10 months of 2019.

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