Touch ‘n Go enters mainstream financial services

GO+ is part of the group’s long-term plan to grow further in the ‘disruptive’ fintech sector

by AFIQ AZIZ / pic courtesy of TNG

TOUCH ‘n Go (TNG) Group has entered into the mainstream financial service sector with GO+ — an inclusive investment allowing TNG eWallet users to save and spend simultaneously.

TNG group CEO Effendy Shahul Hamid said the company’s subsidiary, TNG Digital Sdn Bhd, which owns and operates the e-wallet platform, will capitalise on 15 million registered users to be part of the initiative.

Effendy said GO+ is part of the group’s long-term plan to grow further in the “disruptive” financial technology (fintech) sector.

“With the disruptive nature of financial services, one has to identify sectors in which digital financial services will win over traditional financial services.

“We cannot disregard fintech and rely solely on a consumer-and-supplier concept. We must explore how the disruptive fintech system works.

“We have identified three areas and one of them is asset management and impairment, which has space for disruption, by simplifying the process for everyone,” Effendy said after launching GO+ yesterday.

As a start, he said the company is set to attract up to one million unique investors in the GO+ service, which is already embedded in the Touch ‘n Go eWallet application.

With as low as RM10, users can invest via e-wallet as GO+ has a minimum risk in the money market, besides having high liquidity allowing users to withdraw the money when needed.

Early this year, it obtained approval to operate as a Recognised Market Operator by the Securities Commission of Malaysia.

This allows the company to directly distribute capital market products including money market unit trust funds through Touch ‘n Go eWallet without having to be directed to a third-party application.

Effendy said the TNG Group is also looking to expand into insurance and personal lending, which he said could bring the most value for the firm.

Currently, GO+ is anchored on the Principal e-Cash Fund, a money market fund managed by Principal Asset Management Bhd.

As it is, the company is already expected to grow bigger within the next couple of years, supported by the pandemic disruption leading to the mushrooming of online transactions.

Early this year, it was reported that TNG Digital, which is owned by CIMB Group Holdings Bhd and China’s Ant Group, has negotiated with investors to raise at least US$150 million (RM612.67 million) to fund expansion plans.

According to a Reuters report, Malaysia’s digital payment market is particularly competitive with nearly 50 players.

Effendy said the group has a positive conversation and traction from corporate and private equity funds, with talks still ongoing.

“We would likely stop the fundraising by mid-year. The fund will be used for expansion going forward,” he added.

According to Reuters, the fundraising is expected to give TNG Digital a valuation of over US$700 million and it could end up raising about US$250 million in 2021.

Effendy said while there are reports suggesting other e-wallet and digital transactions not doing well last year, TNG Digital saw a positive uptake on its platform with a growing number of users.

On a related note, Effendy said Touch ‘n Go Sdn Bhd is eyeing a potential digital bank joint venture, but the details remain scarce as the company is taking more cautious steps with the initiative.

“I am evaluating a few partners. There is a huge synergy between digital banks and digital payment companies, but we have not decided 100% that we want to do it or not.

“This is to make sure that we can find the right consortium and once we do, we will certainly participate,” Effendy said.

Effendy said there is so far no plan in the company’s agenda to offer public offerings.

“At the moment, we think both companies under Touch N Go are very self-sufficient and well funded with a strong plan for the future and we are quite comfortable with what we do.

“We will continue to participate in the private market at the moment,” he added.

Meanwhile, Principal Asset Management CEO Munirah Khairuddin said GO+ would offer TNG eWallet users a very low risk and greater liquidity.

“As fund managers, we want to garner best yields but not to compete with the fixed deposit kind of scheme.

“GO+ is convenient, where you can withdraw your money from the savings, and use it with no penalty applied,” she said.

She said GO+ is not a Shariah-compliant investment, but the group is working to cater for such demand in the next phase of the project.

Read our previous report here

TNG eWallet aims for one million investors with GO+ platform