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Malaysia’s RM30 e-wallet initiative
January 15, 2020 News

 

And so it begins. The Malaysian government’s e-wallet initiative to get citizens to embrace e-wallet transactions kickstarted today. As a country that enjoys goodies from the government, anything free from the government is always welcomed with open arms. For e-wallets, the government announced an allocation of RM450 million to boost the usage of e-wallet among Malaysian.

The e-Tunai Rakyat program is expected to see about 15 million eligible Malaysians claim RM30 from the government through one of three e-wallet operators; GrabPay, Boost and TouchNGo. To be eligible, you have to be a Malaysian aged 18 years and above, with an annual income of less than RM100,000 per year.

When compared to China with its population of 1.4 billion, e-wallet penetration over there was really effective. Simply because the infrastructure was well prepared and ready to support the high demand. Meanwhile, over in Malaysia, when the RM30 allocation started its distribution today, the e-wallet servers of Boost and TouchNGo could not cope with the high volume of traffic. The servers seemed prepared to support the sudden surge in demand and registration. It wasn’t only till after a couple of hours were the processes back to normal.

This shouldn’t have happened. E-wallet services need to be available all the time. They can’t afford any downtime. If someone needed to use their e-wallet for a transaction, and the service is offline for example, what’s going to happen? Is the user just going to have to wait or find the nearest ATM to get cash?

And it’s not just about the ability to support the high traffic in demand and transactions. E-wallets need to ensure their transactions are secure and their data is well protected. Right now, they will probably be receiving and processing tons of data as Malaysians begin their claim. Do they have sufficient backup should their servers crash? For now, it seems they do, but looking at the rate of growth in data, they better be prepared for the worst.

Interestingly, none of the e-wallets chosen for the initiative are bank-based. Compared to Singapore, GrabPay is the top e-wallet with the most users followed by bank-based DBS Pay Lah and Fave. Also, in Malaysia, there are close to 50 e-wallet service providers. Apart from the GrabPay, TouchNGo and Boost, the other popular players in Malaysia include Fave, BigPay, RazerPay, Maybank Pay, AliPay, Samsung Pay, just to name a few. Some e-wallets have even ended their services like Digi’s VCash.

When the e-wallet initiative was announced last year, most of the e-wallet players were excited about it, considering the prospects that would come from it. However, when only Boost, TouchNGo and GrabPay were chosen for the program, a lot of the other e-wallets seem to have silenced their views. Apparently, the reason these three providers were selected was mainly because of their huge acceptance not only among users but merchants as well. As such, if you go to most shops today, you will most likely see the QR codes from these guys at the counter. Even then, the adoption was not strong enough to get everyone to use e-wallets as rebates after rebates were provided by merchants and service providers. You had the regular users using their e-wallets but there was not a high growth for new users.

If you were to look at the demographics of users, those aged below 30 would be the ones using e-wallets the most. And it’s not because they are tech-savvy, it is because these guys understand the simplicity of going cashless. Almost all students today have a mobile phone. And almost all of them use mobile phones for social media and gaming. E-wallets are just another app in their phone, but it also allowed them to move around freely, without the need of having cash with them.

Compare them to those above the age of 50, or what I would like to refer to as the senior working class. Some of them are using e-wallets, but many are still sceptical towards going cashless. In fact, judging by the comments on social media, many are still unaware of what an e-wallet is or how to use them. Many are confused about how to access the funds or even verify their e-wallet account.

Or is everyone just going to enjoy their RM30 e-wallet goodie and uninstall the app after that? Are Malaysians ready to become a cashless society? Only time will tell if this RM30 initiative really had an impact or not.

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