Efficient fintech to lead M’sia into RM12.5t halal market

Toyyibpay CEO says local companies must strive to play a bigger role in the global Islamic digital economy 


THE Malaysian digital financial service providers including financial technology (fintech) are urged to collaborate to take advantage of the country’s top position as the world’s most robust Islamic economy ecosystem. 

The top ranking given to Malaysia put local providers in the best standing to tap into a US$2 trillion (RM8.95 trillion) halal consumption market, which is driven by the digital economy and projected to grow at a compounded average growth rate (CAGR) of 7.5% to US$2.8 trillion (RM12.53 trillion) by 2025. 

ToyyibPay CEO Rosli Amir said local companies must strive to play a bigger role in the global Islamic digital economy by developing support for its three core elements — finance, industry and entrepreneurship. 

He highlighted that support for these core elements could be achieved by providing services that are efficient, yet affordable. 

“By providing a secure, efficient and affordable platform for transactions, for instance infaq transactions which are quite unique to ToyyibPay, we aim to promote the growth of the Islamic digital finance economy and increase financial inclusion for underserved industries and entrepreneurs,” he added. 

Rosli, who co-founded ToyyibPay in 2019, is also a council member of the Islamic Chamber of Commerce Malaysia, overseeing the digital economy portfolio. 

ToyyibPay, a Shariah-compliant digital payment solutions provider, is touted as Malaysia’s fastest-growing digital payment service by being the first to achieve a
gross transaction value (GTV) of RM1 billion within two years of inception. 

Last year, ToyyibPay recorded a GTV of RM1.3 billion, driven by rapid Internet penetration and growing demand for online transactions. 

Infaq is a term that refers to charitable giving in Islam, which involves giving a portion of one’s wealth to help others in need. ToyyibPay offers a platform for individuals and organisations to make infaq payments for a minimal fee, and commercial transactions in a manner that is Shariah-compliant and affordable. 

Malaysia Most Robust Islamic Economy Ecosystem

According to the State of the Global Islamic Economy Report 2022, Malaysia, for ninth consecutive years, is the top country among the covered 81 Organisation of Islamic Conference (OIC) members with the most robust Islamic economy ecosystem, covering sectors of finance, halal food, travel, pharmaceutical and cosmetics, fashion and recreation. 

The report highlighted that the global Islamic economy is represented by US$2 trillion of consumer spending in 2021 across the six sectors by 1.9 billion Muslim worldwide, all of which are impacted by Islamic-inspired consumption needs. Driven by digital growth, it food and beverage, with Muslim consumers estimated to spend over US$15 billion on these products in 2020. 

In terms of halal pharmaceuticals, Malaysia is noted for its strong regulatory environment and commitment to ensuring that all pharmaceutical products are Shariah-compliant, where Muslim consumers are estimated to spend over US$2 billion in the same year. 

Halal tourism is another important market in Malaysia, with Muslim consumers estimated to spend over US$10 billion on travel and tourism services, including flights, hotels and transportation. 

Malaysia’s efforts to promote halal tourism, including the development of halal-friendly destinations and the expansion of halal-certified tourist services, are expected to drive further growth in this market. 

Making Infaq More Accessible

According to Rosli, ToyyibPay provides a range of tools and services to help individuals and organisations manage their infaq donations such as infaq management services, zakat calculators and analytics tools. 

“By making the process of giving infaq more convenient and accessible, ToyyibPay aims to encourage individuals and organisations to fulfil their religious obligations and contribute to the betterment of society.” 

He added that the number of the infaq transactions has escalated significantly due to the pandemic and increased awareness towards society needs in Malaysia. 

“The numbers of infaq transactions had increased to almost RM150 million last year (2022) compared to RM100 million in 2021. 

“Therefore, we are estimating the infaq transactions to reach RM300 million this year as people start to be more aware of online infaq and post-Covid activities,” he said. 

He said ToyyibPay plans to develop an easier system for people to donate through a variety of channels and participate in crowdfunding campaigns, or support society causes. 

“In Malaysia, infaq is an important part of Islamic culture and is widely encouraged by leaders and societies.

“There are numerous Islamic charities and organisations in the country that accept infaq donations to support a variety of causes, including education, healthcare, poverty alleviation and disaster relief. 

“Infaq can also be used to support the development of the community, such as funding the construction of mosques, schools and other communal facilities,” he said. 

He added that in Malaysia, infaq is made through cash donations, but now with digital transformation, it can be through online transfers, or by using mobile payment platforms. 

“Some Islamic banks and fintech companies also offer infaq-focused products and services, such as zakat calculators and zakat management services. But to make the process of giving infaq more convenient and accessible, they need gateways like us which offer zero charge. 

“This is part of ToyyibPay contributions to society. We are not taking any percentage from people’s donations,” he said. 

Inclusive, Ethical Financial System

Rosli added that ToyyibPay also strives to create an inclusive and ethical financial system that aligns with the values and principles of Islam. 

“It also encompasses the use of digital platforms for the delivery of Islamic financial products and services, such as online Islamic banks and peer-to-peer financing.” 

To promote its infaq services, ToyyibPay is securing collaborations with other Islamic organisations such as Yayasan Islam Darul Ehsan. 

He claimed that Toyyibpay is the only local payment gateway company in Malaysia that fully meets Shariah-compliant principles. 

“Some companies might have Shariah-compliant products, but they themselves do not comply fully with Shariah as some parts of their operations are still using conventional methods,” he said.

  • This article first appeared in The Malaysian Reserve weekly print edition

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