E-wallets bullish to grow beyond retail payments

Boost is envisioned to grow its digital financial services to the insurance technology industry


E-WALLET service providers in the country, which have been thriving especially during the Covid-19 pandemic, are now taking the cashless payment ecosystem to the next level beyond retail transactions.

Boost CEO Mohd Khairil Abdullah said opportunities are still in abundance across wide-ranging industries and sectors for the utilisation of e-wallets as the e-payment capabilities are beyond retail payments.

He said Boost is envisioned to grow its digital financial services to the insurance technology industry.

“Especially during the pandemic and in view of the recent rise in confirmed cases, insurance is a necessary investment and protection.

“We are closely working with our insurance partner in exploring ways to offer micro-insurance coverage that is affordable but provides a large amount of protection as well as expanding market reach,” Mohd Khairil told The Malaysian Reserve (TMR) recently.

As it is, he said Boost has a comprehensive suite of micro-insurance coverage for users, and small and medium enterprises (SMEs) under “Boost Protect”.

The protection options cover bill payments, credit card bills, cash allowance in the event of hospitalisation, smartphone screen damage and Covid-19 Assist, an additional financial assistance programme in the event of being infected by the virus.

Mohd Khairil said the next biggest movers in the digital payment industry are expected to be across the complete eco-system, encompassing both user and merchant segments. micro and small businesses that are still predominantly cash-based, would be among the new growth areas.

He said the ecosystem will equip merchants with cashless payment tools with e-wallets, provide micro-financing and micro-insurance through its sister company Aspirasi and support businesses to move offline to online.

For users, Mohd Khairil said there has been a significant growth in bill payments, as Boost now allows payments of utility bills such as electricity and water, Internet, TV and postpaid plans.

Boost currently has over 8.8 million users and over 205,000 merchants nationwide, including a strong footprint in Sabah and Sarawak. Mohd Khairil said Boost targets to reach 10 million users and over 220,000 merchants by year-end.

TNG Digital Sdn Bhd CEO Ignatius Ong said Malaysia’s e-wallet ecosystem has passed the infancy stage and is now at an adolescent stage.

He said e-wallet usage is becoming second nature and people can expect their salaries to be paid via e-wallets possibly in the next five to 10 years.

“With 98.5% of the business establishments in Malaysia being SMEs, e-wallets like ourselves have been more focused on aiding these businesses in a bid to revive our economy together,” Ong told TMR.

Touch ’n Go eWallet has a network of more than 15 million users, mapped to over 250,000 merchant acceptance points nationwide across multiple sectors, including online and offline merchants, SMEs, food and beverage, groceries, transportation and more.

TMR previously reported that Bank Negara Malaysia (BNM) data showed that e-money transaction value hit RM20.8 billion in nine months (9M), surpassing the total value recorded for the whole year of 2019 at RM18.2 billion.

The RM20.8 billion in value was RM8.7 billion higher than the RM12.1 billion registered in the same 9M period last year, representing a 71.9% year-on-year (YoY) jump, despite a lower volume.

The volume of e-money transactions for the January-September period contracted by 164.9 million transactions, or 10.8% YoY, to 1.37 billion from 1.53 billion, attributable to significantly lower volume recorded in April and May during the Movement Control Order period.

The volume of e-money transactions ranges from over 128 million to 200 million monthly this year, but the months of April and May only saw 46.5 million and 96.3 million transactions respectively.

E-money transaction volume hit 2.09 billion in 2019, about 724 million transactions left to catch up from the 1.37 billion transactions recorded in January-September this year.

The central bank defined e-money as a payment instrument that contains a monetary value, paid in advance by the user to the e-money issuer. Malaysia has 47 non-bank e-money issuers, according to BNM’s website.