Coronavirus pandemic has steepened adoption curve of e-wallets in Malaysia
KUALA LUMPUR – The use of contactless payments and adoption of e-wallets are on the rise during the coronavirus outbreak and movement control order in Malaysia, with some players seeing subscriber numbers double in the last month.
E-wallets are no longer just a convenience, but a crucial part of the “new normal” and may even help flatten the curve, besides helping SMEs do business during a Movement Control Order (MCO) in place since March 18, say service providers.
“By going cashless, people can avoid handling physical cash completely and minimise human contact,” said Mr Ignatius Ong, chief executive officer of TNG Digital, which offers the Touch ‘n Go eWallet service.
Using e-wallets is safer and more hygienic, and users can reload and store money in the app without having to queue up at ATM machines, he added.
Touch ‘n Go eWallet, which has a network of over 10 million users, is offering incentives such as cashback and free delivery for food orders. It is encouraging online food traders to go cashless.
Malaysia’s top lender Maybank has seen a spike in the adoption of its MAE e-wallet, which allows users to pay for purchases by scanning QR codes with their smartphones, with sign-up rates more than doubling since the MCO.
“The usage of e-wallets and contactless payments allows social distancing to be observed as customers can scan and pay at the cashier… from their smartphones without needing to handle bank notes. So in that way it does help to minimise physical handling and the potential spread of the virus,” Ms Kalyani Nair, head of Maybank’s Group Virtual Banking, told The Straits Times.
Maybank has temporarily waived merchant transaction fees, to encourage contactless payments.
It has also added food hawkers, especially those without the means to sell online, to its Maybank2u banking platform.
GrabPay Malaysia’s cashless transactions have grown by about 1.7 times since the MCO, said Ms Priyanka Madan, deputy head of GrabPay Malaysia.
“It is important to encourage businesses to adopt cashless and the digital economy as by doing so, they have an alternative source of income and still be able to serve their customers especially at a time like this,” she said.
The Penang government, for example, is planning to make all public markets go cashless by June.
There are around 50 licensed “e-money issuers” in Malaysia, including five banks.
Last year digital wallets accounted for seven per cent of e-commerce payment transactions in Malaysia. Before the Covid-19 pandemic, this figure would hit 16 per cent by 2021, according to JP Morgan.
In January, the government had set a target of 15 million e-wallet users – or about half of the population – in its push towards a cashless society, and offered free shopping money worth RM30 (S$9.80) to eligible users.
Besides e-wallets, Islamic authorities last week approved online zakat (tithe) payments this Ramadan because of the MCO.
Datuk Dr Awang Bulgiba Awang Mahmud, professor of epidemiology at University Malaya, said the use of e-wallets “may have some effect on the epidemic curve by reducing the amount of physical contact”, but added that it is not known by how much.
Among those contributing to the steepened adoption curve of cashless payments is analyst Cloud Wong, 30. He prefers using GrabPay to pay for purchases, or payWave, which lets him pay by placing his credit or debit card near a payment terminal without having to key in a pin.
“I don’t want to handle cash. It is safer this way in case there are virus particles on notes,” he said.
Predicting that this inclination is here to stay, TNG Digital’s Mr Ong said: “Even when the MCO is lifted, the rakyat (people) will remember this cashless habit that has become their ‘new normal’ and continue to transact digitally.”