Touch ‘n Go enters financial services

TNG Group chief executive officer Effendy Shahul Hamid (pic) said TNG Digital Sdn Bhd will continue to focus on enhancing payment use cases and to bring forth more digital financial services products for everyone.

KUALA LUMPUR: Touch ‘n Go Sdn Bhd (TNG Group) has kicked the e-wallet sector up a notch with the rollout of GO+, a financially inclusive investment product.

The product allows Touch ‘n Go eWallet users and all Malaysians to gain access to low-risk money market investments from as low as RM10.

Being the first e-wallet in Malaysia to launch an investment product, its foray into the mainstream financial services sector marks the first of many to come as the group is working on rolling out more financial services and products over the next 12 to 24 months.

TNG Group chief executive officer Effendy Shahul Hamid (pic) said TNG Digital Sdn Bhd will continue to focus on enhancing payment use cases and to bring forth more digital financial services products for everyone.

“We will continue to build on today’s money market fund product. We have things lined up, they are focused more on investments.

“We will also be intermediating banking services and certainly money transfer services, ” he told the media during the virtual launch of GO+ yesterday.

TNG Digital, the joint venture company between CIMB Group Holdings Bhd’s wholly-owned TNG Group and China’s Ant Group, is the company behind the Touch ‘n Go eWallet.

“If you look at financial services and the disruptive nature of financial services, one has to identify sectors in which digital financial services will win over traditional financial services.

“We’ve identified three areas. One is in asset management and investment given the high ability to disrupt that space, meaning to simplify the process for everyone.

“We’ve also identified insurance and personal lending. We feel that we can bring in the most value in these three areas.

“And today, we’re already working with different partners to make sure that we’re able to bring you more GO+ variants and certainly more GO+ verticals to the table, ” said Effendy, adding that the group is targeting one million GO+ accounts by the end of the year.

The GO+ product is anchored on the Principal e-Cash Fund, a money market fund managed by Principal Asset Management Bhd.

The product co-creation collaboration essentially combines Touch ‘n Go eWallet’s expertise in technology and ecosystems and Principal’s core expertise in investment strategy and fund management.

Principal Asset Management CEO Munirah Khairuddin said the Principal e-Cash Fund was developed specifically for GO+, focusing on convenience and yield enhancement.

“GO+ is very low risk, almost risk free. We’re just placing out (funds) with good banks and we will source for the best yields in town.

“As professional fund managers, we rate the banks ourselves through their credit scores, ” she said.

The GO+ daily return rate is at around 1.4% per annum and while some may draw comparisons with the conventional fixed deposits, Munirah explained that it was designed with flexibility, liquidity and convenience where users can cash out at any time at no charge.

“It was never meant to be comparable to fixed deposits. The price of convenience here is you can uplift your money and you can use that anytime 24/7 and there’s no penalty.

“The comparison should be GO+ versus placing funds in an e-wallet with no returns or any current account or savings account, ” she said, adding that they were also looking to roll out more investment products across the risk spectrum and syariah products.

Adding to that, Effendy said Touch ‘n Go eWallet already has different kinds of investment products in the pipeline with Principal Asset Management.

Touch ‘n Go eWallet is the first e-wallet provider to obtain approval to operate as a Recognised Market Operator by the Securities Commission.

The approval enables the company to directly distribute capital market products, including money market unit trust funds, through the Touch ‘n Go eWallet platform, without having to be directed to a third-party application.

Meanwhile, Effendy said TNG Digital is looking to close its fundraising exercise by mid-2021.

“We certainly have had very positive conversations. We haven’t really figured out what levels we’re going to stop the fundraising at but we certainly have very positive traction from a combination of corporates and private equity funds, ” he said in a question-and-answer session after the GO+ launch.

Effendy said the funds will be for the company’s expansion moving forward.

“These businesses require money to operate and we have a very clear view as to where we want to bring this business, ” he said.

In January, Reuters reported that TNG Digital was in advanced talks with investors to raise US$150mil, which will see CIMB and Ant Group paring down their stakes.

Effendy also said that there were no plans for the group to pursue public listing as both Touch ‘n Go and TNG Digital are self sufficient and well funded.

“We have some very strong plans for the future and we are still quite comfortable where we are.

“We will continue to participate in the private markets but at the moment, we don’t have plans for public market offering, ” he added.

Meanwhile, Effendy also revealed that he is currently evaluating several potential digital bank joint venture proposals, but this will be at the TNG Group level.

Effendy agreed there is a huge synergy between digital banks and digital payment companies but Touch ‘n Go has yet to decide if it would go into it.

“It’s premised on making sure that we’re able to find the right consortium and if we do, we’ll certainly participate in one way, shape or form, ” he said.

The Touch ‘n Go eWallet has over 15 million registered users, 12.5 million of which have gone through its eKYC process. The platform also serves over 300,000 merchants.

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