In Malaysia, e-wallets are all the rage these days. The Malaysian public’s interest with e-wallets was further accelerated when the government set aside RM 450 Million for the e-Tunai programme, which grants qualifying Malaysians RM 30 in selected e-wallets.
With the constant bombardment of promotions and ubiquity of e-wallet acceptance points especially in urban centers, one might easily think that e-wallets have been around for a long time in Malaysia.
E-wallets in Malaysia are a relatively recent phenomenon, most players including the three big names like Boost, TNG Digital, and GrabPay all received their licenses as recent as 2017.
The e-wallets space in Malaysia is both competitive and capital intensive, with some of its players heavily incentivising user activity with cashbacks and discounts — a strategy that while may prove effective at first, may not be sustainable in the long run, something that the Assistant Governor Bank Negara Malaysia seems to agree with.
Remaining in the e-wallet space is not for the faint-hearted, even players with a strong pedigree like the Digi-backed vcash has dropped out of the race just last year.
We sat down with Ooi Huey Tyng, Managing Director, Head GrabPay for an interview to get a sense of what one of the largest players in Malaysia is doing to navigate this space.
During the early phase of GrabPay, much of the transactions were limited to paying for ride-hailing services, Tyng reflected that GrabPay has come a long way since then, she shared that 50% of GrabPay transactions are now used outside of transport and it has grown over 40% in last 6 months of 2019.
Tyng revealed that for GrabPay’s next phase of growth they will be transitioning their focus from Grab’s own ecosystem to a more open ecosystem play. Besides engaging e-commerce players like Zalora to enable GrabPay as a payment option they are also building APIs to enable interested online players to do the same.
As part of their open ecosystem play, Tyng also revealed that their PayLater service will be made available to their partners, which means very soon online shoppers can opt to pay immediately or at the end of the month for their goods. For now, PayLater is only available for Grab Ride, GrabFood Orders and GrabExpress deliveries.
As part of its strategy to appeal to a wider segment of customers, Grab has teamed up with Citibank to launch co-branded credit cards in Philippines and Thailand — with Malaysia’s release just around the corner.
Just last year they have also launched their GrabPay Card in partnership with Mastercard. The card is completely numberless and it also comes with the feature of in-app lock card function that is PIN-protected, allowing users to instantly suspend payments for lost cards.
They are looking at launching the same service in Malaysia sometime this year.
Getting a virtual banking license is the natural transition e-wallet operators seeking more revenue streams, Grab with its many digital financial services ranging from lending, insurance, payments and most recently wealth management, it would make sense that they would eye for a virtual banking license in Malaysia.
While Tyng did not specifically say that Grab will apply for the license, she revealed that Grab is definitely keen to consider for a virtual banking license in Malaysia.
However, given that Grab has also entered into a partnership with Singtel in Singapore to bid for the license, it is hardly surprising to anyone that they are also considering the Malaysian market as well.
Tyng did not rule out the possibility of a consortium model in Malaysia.