KUALA LUMPUR: Touch ‘n Go Sdn Bhd’s (TNG) tie-up with Alibaba’s Ant Financial Services Group to build an e-wallet for the Malaysian market is an exclusive deal, says Effendy Shahul Hamid of CIMB Investment Bank Bhd.
“While the digital platform that we will build will be open to integration with all other financial institutions here, the partnership with Ant Financial to build a specific e-wallet component for Malaysia is exclusive to TNG,” said Effendy, also the chief executive officer of group asset management and investments of CIMB Group Holdings Bhd , the parent of TNG, after the inking of an equity joint-venture (JV) agreement between TNG and Ant Financial yesterday.
It is understood that Ant Financial has inked similar deals with particular institutions in a few countries in the region, such as Emtek Group in Indonesia, CP Group’s Ascend Money in Thailand, Paytm in India, Kakao Pay Corp in South Korea and Mynt in the Philippines.TNG is a 52%-owned subsidiary of CIMB, while Ant Financial is the parent company of Alipay.
The equity JV agreement will see the formation of a JV company, whereby TNG will be the major shareholder and Ant Financial a minority shareholder.
The JV will leverage on both parties’ local market insights, technology capabilities, market experience and brands to introduce a world-class mobile platform for payments and other financial services.
Meanwhile, the capital injected by both parties will go towards the creation of a world-class online and offline payments provider, delivering superior mobile wallet solutions and other related financial services.
This will mark Ant Financial’s first investment in Malaysia, though no investment sum has been fixed yet.
CEO Eric Jing said Ant Financial takes the approach of collaborating with strategic partners overseas and enabling them with innovative solutions to bring digital financial inclusion to more people across the world.
“Given TNG’s leading position in the market and vast customer base, we believe that we can help it to offer exciting and innovative products to Malaysian consumers,” said Jing.
To date, there are more than 10 million active Touch ‘n Go users in Malaysia, who use the cards on a daily basis for electronic payment purposes at toll roads, public transportation systems, and parking and retail outlets.
The new e-wallet will give current and new TNG users access to more services conveniently on their mobile phones, including e-commerce.
Both TNG and Ant Financial have not decided on the brand of the e-wallet, though it is likely to revolve around the brand name of Touch ‘n Go, being a strong Malaysian brand.
Jing said individuals as well as small and medium-sized enterprises (SMEs) will be able to benefit from the development of technology as they will be able to purchase or do business in a more convenient and efficient way in both domestic and international markets, enjoying a broader range of services.
Malaysia is the first country to join the Electronic World Trade Platform, a programme initiated by Alibaba Group executive chairman and founder Jack Ma to help SMEs expand their trading capabilities worldwide more easily, directly demonstrating the nation’s enthusiasm in embracing technological innovation.