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How the COVID-19 Pandemic Has Accelerated the Digital Economy for SMEs in Malaysia
September 28, 2021 News


Written by: Muhammad Zulhusni, Journalist, AOPG

At a recent SME Digital Transformation’ webinar hosted by SME Malaysia Academy and Huawei Technologies (Malaysia) Sdn Bhd, Chan Kok Long, Co-Founder and Executive Director of Ipay88 Holdings Sdn Bhd, Eric Chong, CEO of Boost Business, Axiata Digital E-Code, KT Tan, Head of Cloud Business Unit, Huawei Malaysia and Louise Chay of Big Onion Food Caterer Sdn Bhd shared their insights on how SMEs can digitally transform their businesses, succeed in this digital world, and contribute significantly to the nation’s digital economy.

According to Chan, digital payment is the number one top trend in Fintech right now. He calls digital payments the “mother of all disruptions,” and the COVID-19 pandemic has accelerated their adoption for all industries. In addition, Chan believes that digital payments will gain even more traction in the coming years, particularly with the rollout of 5G.

“5G will totally change the way people make payment. Things like people walking into a shop and they don’t need to flash out the payment card or even handphone to scan like what they’re doing now, because of 5G. Its broadband speed, as well as capacity, make everything so seamless that the moment you enter a shop, the camera itself will be able to recognise your face and once the ecosystem knows who you are, straight away the entire banking system will know how much money you have, which account you have, whether you have money in credit card or whether you have money in your e-wallet.”

He also stated that the rise of e-wallets is the start of a cashless society and that the COVID-19 pandemic has accelerated its adoption. This is something Eric Chong agrees on.

According to Boost’s report, the number of users who use an e-wallet to conduct cashless transactions increased by 2.6 times between January 2019 and June 2021. However, Eric believes that we have not yet reached the point where we need to be in order to build a completely cashless society.

“I think for us to be successful in building a digital economy, for us to be successful in increasing the adoption of e-wallets or digital payment, companies like Boost and all the other companies out there would have to bring, to the market, customers, and merchants, relevant use cases. So, there must be a reason for the customers to want to go cashless, why the customers do not use cash other than the pandemic. The pandemic has helped in terms of driving the usage of digital payment, but that alone is not sufficient,” said Eric.

As a result, Boost has created an ecosystem to bridge these gaps via the following services:

  • “Tap & Pay” Online & Offline Shopping.
  • Cashless Payment for Parking & Transit.
  • Digital Engagement & Transaction.
  • Adoption of Cashless Payment in the Education Sector.
  • Cashless Donation to NGOs, Mosques, Churches, Temples.
  • Empowering Local Merchants & Partners with Business Solutions & Financing.
  • Convenient Bill Payments & Insurance Products.

The Challenging Journey Ahead for Cashless Payments

In addition, Eric mentioned that going on a cashless journey is not easy as there will be challenges along the way, such as poor internet connectivity, customer and merchant mindset of migrating from a cash usage, lack of skillset/expertise and cost.

Big Onions, a food caterer company, also had similar challenges, especially when it comes to digitalisation. According to Louise, digitalisation among SMEs may be less clear because they have incorrect perceptions of it – digitalisation is perceived as complex, costly, and unnecessary for some SMEs, but it does not always imply expensive equipment.

“At Big Onion, we invested in cashless payment system, procurement and inventory system, waste management system, accounting system, digital marketing, e-commerce but still a lot of trial and error for us to go through and sometimes it’s like a nightmare,” explained Louise.

She also stated that to get started on digital transformation, they needed to collaborate with the right technology solution provider to create affordable and high-quality digital infrastructures to raise awareness of the benefits of digitalisation’s backend process.

This is where a company like Huawei comes into play.

“Huawei doesn’t have the [line of communication with] you as an SME or as a user. We are always the back branches that support companies like Boost, Ipay88, and many others to [ensure] that we provide connectivity for them and become [technology enablers],” said KT.

Aside from 5G transforming digital payments, KT emphasised that the cloud and AI are critical components that should not be overlooked. According to KT, the cloud will provide enabler layers to support in-house applications, allowing businesses to always have their applications, such as an e-wallet, available for users without any failures.

In terms of AI, it will introduce an innovation that will provide users with a better experience. “Users will be able to feel secure [when] transacting online, purchasing their goods. They will feel it is interesting when shopping online to get their products. This is all with facial recognition or the one-touch on the screen on the phone,” said KT.

He concluded that Huawei, as a global player, is attempting to make technology accessible globally based on local needs. As a result, they are establishing themselves in every country and will continue to expand and assist the government in transforming education and health care lines, as well as assisting digital native businesses in conducting their operations online.