KUALA LUMPUR: The Malaysian e-wallet environment is ripe for consolidation, say top industry players.
Representatives from key e-wallet providers namely Boost, TNG Digital and Maybank said in a forum yesterday that only a few service providers will be able to sustain operationally over the long run.
Speaking at the “Riding the Cashless Wave” forum held on the second day of the MyFintech Week 2019 conference, TNG Digital chief executive officer Syahrunizam Samsudin said Malaysia has more e-wallet providers than the world’s second largest economy, China.
He pointed out that there are about 40 e-wallet services in Malaysia currently.
“Our population is only about 32 million.
“In comparison, China has 1.5 billion people. Guess how many e-wallets they have? Only two,” Syahrunizam said.
Axiata Digital Services chief executive officer Khairil Abdullah said that “consolidation is inevitable”.
Axiata Digital is the service provider of “Boost”.
According to Khairil, the need for market consolidation in the e-wallet segment will intensify in line with the increase in demand for e-wallets and payment solutions.
“Internally, we have a view that within three years or so, the non-cash payments in Malaysia will be way above 50%.
“At that stage, only big players with strong financial capacities will make it,” he said.
Based on a report last year by The Star, cashless payments make up about 20% of total payments in the country, with only half of that involving e-wallets.
Maybank head of virtual banking and payments Kalyani Nair told the forum that “only those willing to go on a long marathon” will persist in the Malaysian e-wallet environment.
She added that e-wallets that offer actual benefits to users will also remain relevant and competitive.
“There will come a time when there will be a lot of fatigue among e-wallet users in Malaysia due to the increasing number of service providers. Then it is back to the marathon,” she said.
The panellists said that the adoption rate for their e-wallet services among Malaysian consumers has been encouraging and has continued to increase over the years.Similarly, more merchants have also adopted e-wallet services to receive payments.