The year 2018 was certainly a defining one for the digital payments landscape, with the emergence of an array of e-wallet players in Malaysia.
But what is an e-wallet, you ask?
The term e-wallet is broadly used to capture a variety of electronic and mobile payment services that often works through an app installed on your smartphone. To use your e-wallet to pay for purchases, you will need to either link the app to your bank account or top up funds to the wallet using other methods like credit/debit cards and top-up tickets, for example.
This concept also goes by several other names, including ‘digital wallet’ and ‘mobile wallet’. An e-wallet essentially allows consumers to make commercial transactions without having to use the physical wallet, although it is important to note that how e-wallets work vary, with different types of e-wallets offering different methods.
Payments are not the only thing that these e-wallets are capable of handling as each e-wallet player has their own range of features that will bring specific benefits to their target audience, including discounts and special offers along with loyalty card integration and incentives like cashback promotions.
TNG Digital Sdn Bhd, for instance, takes e-payment one step further with its Touch ‘n Go e-wallet, which incorporates the RFID feature as well as the TNG Card feature.
The RFID feature allows for users to experience a seamless and convenient driving and toll payment process, by having the system to scan the RFID sticker attached to each vehicle.
Toll collection gets expedited, and Malaysians can track, top-up and monitor their credit conveniently. The Touch ‘n Go e-wallet is the only payment platform that provides this feature for our users in Malaysia.
Meanwhile, through the TNG Card feature, users are able to add up to three cards to the e-wallet and use the card as a medium to pass through tolls. However, the toll fee will be deducted from the e-wallet first.
This feature is currently being pilot tested along DUKE Highway, and the response from the public has been very encouraging. Roll out across Klang Valley will be done in stages. With this, users will no longer need to reload their physical TNG cards at the Tambah Nilai lanes for toll payments; they just need to make sure that the e-wallet is constantly reloaded.
Since its inception in early 2018, the Touch ‘n Go e-wallet has garnered over 2.3 million registered users to date with users being able to transact for anything from F&B, lifestyle and shopping to paying bills and most importantly, mobility and transportation around Malaysia.
Interesting fact: At the moment, the Touch ‘n Go e-wallet has over 30,000 merchants with TNG Digital aiming to hit as many as 40,000 merchants within 1Q2019.
The company has also partnered with Mid Valley Megamall and The Gardens Mall to enable QR-payments through the Touch ‘n Go e-wallet across 80% of its retail outlet this year, thus allowing Malaysian shoppers to enjoy the convenience of going cashless at the country’s number one shopping destination.
Towards a Cashless Society
The year 2018 has certainly been a defining year for the digital payments landscape, with the digital wave being no small part due to Bank Negara’s vision for Malaysia to move towards a cashless society by 2020.
“Given the rate of development in today’s technology, transactions in Malaysia are projected to be almost cashless by 2025,” TNG Digital Sdn Bhd CEO Syahrunizam Samsudin tells Smart Investor.
The case is evident in the higher growth of online shopping among Malaysians, which indicates the fact that Malaysians are becoming more accustomed to shopping and transacting daily using mobile phones and computers without having to handle physical cash.
“On top of that, the government has always been in full support of a cashless society, with transparency and combating corruption as their biggest motivation.
“Thus, the emergence of new technology and payment method such as the e-wallet, coupled with the government’s push for a cashless ecosystem, and continuous shift in global trends will further enhance the growth of the fintech industry,” Syahrunizam adds.
Having been one of the earliest adopters of the e-wallet trend, China has been touted the poster boy for this trend. While China has fully embraced digitalisation, Syahrunizam believes that Malaysia has great potential to become a fully cashless society, especially since there is demand for a swift, more convenient access to products and services.
“The key is to enable e-wallet users to use it conveniently in various places to perform basic and daily financial transactions. Our immediate focus is to create a service in the hands of Malaysians that they will use.
“We believe that Malaysians are well on their way to becoming a cashless society. There is already an increased confidence among the public that they can last up to three days without having cash in hand, and we believe that they need a little nudge to make cashless an everyday habit,” says Syahrunizam, citing the 2017 Visa Consumer Payment Attitudes study.
In fact, according to the study, Malaysians are increasingly becoming confident in going cashless with six in 10 saying they can go without cash for an entire day while close to half of them (41%) say that they could last three days without cash.
Six in 10 Malaysians have tried going cashless and out of this group, close to 60% of respondents said they have successfully gone cashless for at least a few days.
Credit Card vs e-Wallet
As the global economy evolves, so does the ways in which people pay. Cash was once king, until credit and debit cards took its place. And now, e-wallets are giving both cash and plastic a run for their money.
But how safe are e-wallets as compared to cash or credit card?
“Credit cards are still regarded as a trusted source of payment mode around the world, with credit card companies being lauded for their efforts, as evident in the success rate of managing consumers’ money,” Syahrunizam points out.
However, this doesn’t mean that e-wallets are not gaining popularity. According to the study conducted by Accenture in 2017 titled Driving the Future of Payments, of the 1,500 consumers surveyed in the US and Canada, 64% plan to use a mobile wallet in 2020.
This goes to show that consumers are becoming more open and receptive to try out a more convenient payment option to serve their daily needs.
For one, e-wallet providers are not privy to users’ private banking information. Rather, they act as proxies and only capture the transactions made with the money that is stored within the e-wallet itself.
Besides, consumers can reload their e-wallets whenever they want, even before a transaction and with the exact amount they are going to spend. What’s more, as e-wallet apps are encrypted with the highest security standards, end-to-end transactions become much faster.
In terms of security, since the e-wallet app is stored on a smartphone, users also receive an added layer of protection, given that smartphones are now equipped with a variety of security measures such as password protection, voice recognition and fingerprint access.
Addressing Cybersecurity Concerns
Despite e-wallets becoming the new way to pay, they also come with various threats and risks, with the rise of e-wallets giving convenience to users but at the same time also opening new doors for money-hungry hackers.
“Digital payment apps from different players – from big companies to the freshest start-ups – make the financial industry highly fragmented,” notes Kaspersky Lab General Manager (Southeast Asia) Yeo Siang Tiong.
“While banks have their own ways to secure their networks and systems after the recent headline grabbing cyberattacks, e-wallet companies have yet to establish a more concrete security framework.”
According to Yeo, in addition to apps, online payments are also powered by Quick Response (QR) codes which efficiently allow financial transactions to be one scan away. This does not mean, however, that they are completely safe, as these QR codes may contain potentially dangerous links within them.
“We have since warned about how cybercriminals can use this shared infrastructure technology to steal money – from replacing pictures with codes online to physically gluing their malicious QR codes over genuine ones on real-world posters and notices,” he reveals.
On whether Malaysians are doing enough to protect their phones from these cyber threats, Yeo notes that according to the Malaysian Communication and Multimedia Commission, awareness from smartphone users to protect their personal data has increased, with 64.5% of users vigilant in protecting their mobile phones using password and 44.5% backing up their photos and contacts.
Unfortunately, the number of Malaysians with mobile device security solutions on their smartphones remain low.
“Smart gadget users need protection for their devices. When you buy a PC or a laptop, the first thing most users would do is to install an antivirus solution. However, the same cautious approach does not apply to smart devices like smartphones and tablets. Sadly, many would install physical security essentials such as screen protectors or protective cases instead,” Yeo laments.
Indeed, with their online money available to be transferred and received in just a few clicks within seconds, e-wallet users now have a heavier responsibility as to how they secure their devices and their finances.
“E-wallet users have to be more cyber-savvy now. They have to be aware of the existing risks as well as the precautionary measures to keep themselves and their hard-earned money safe,” Yeo concludes.
DuitNow – the service that allows bank customers to transfer money instantly and securely using the recipient’s mobile phone number – is now available to the public at the internet and/or mobile banking channels of the following banks:
- Ambank (M) Bhd
- Bank Islam Malaysia Bhd
- Bank of China (Malaysia) Bhd
- BNP Paribas Malaysia Bhd
- CIMB Bank Bhd
- Citibank Bhd
- Hong Leong Bank Berhad
- HSBC Bank Malaysia Bhd
- Malayan Banking Bhd
- OCBC Bank (Malaysia) Bhd
- Public Bank Bhd
- RHB Bank Bhd
- Standard Chartered Bank Malaysia Bhd
- United Overseas Bank (Malaysia) Bhd
An additional 17 banks and non-banks will soon launch the DuitNow service as well.
Customers wishing to receive DuitNow fund transfers using their mobile number need only perform a simple one-time registration to link their mobile number with their account number at their bank.
Customers may also link their MyKad or MyPR identity card numbers, army or police numbers, Passport numbers or Business Registration numbers to their bank accounts in order to receive money.
Bank customers can now view, modify or transfer their DuitNow registrations via 14 banks’ internet or mobile banking channels.
Keeping Your E-Wallet Safe
While e-wallets are safe to use, they are not 100% secure, and despite your personal and financial data being encrypted, stored and protected on secure servers, there is always an ever-present risk when dealing with financial-related matters. According to Kaspersky Lab General Manager (Southeast Asia) Yeo Siang Tiong, these are some security tips to keep one’s e-wallet as safe as possible:
- Think before you click for a digital transaction to go through. Think logically about what would happen, and what impact this would have on you;
- Use only your secured personal device. Be sure that your PC and smartphone have the updated OS and solid cybersecurity solution;
- Verify the site or app that you will be using – check if they are legitimate and if they have strong encryption;
- Make sure you have a strong, unique password (which you can test at https://password.kaspersky.com);
- Implement two-factor authentication;
- Download from official store; and
- Do not use installation files.
Kaspersky has, in addition to anti-virus software for computers, internet security products designed specifically for Android and iOS. These include:
- Internet Security for Android: Premium protection to protect mobile lifestyle, sensitive personal information stored on your Android powered devices. The protection covers even if your phone or tablet is lost or stolen. It also allows you to filter out unwanted calls and texts.
- Kaspersky Password Manager for iOS: Securely stores passwords, addresses, bank card details, private notes and images of confidential documents, like passport and driver licence. You can synchronise them across all your devices, giving you faster access to your online accounts, apps and important information.
- Kaspersky QR Scanner for iOS and Android: A free mobile application which can not only read information from QR codes, but also warn users about potentially dangerous links within them.
Digi, MPay and Mastercard Offer New Digital Payment Option
Digi Telecommunications Sdn Bhd has announced its partnership with ManagePay Systems Bhd (MPay) and with Mastercard as a supporting payments technology partner, to offer a new payment proposition to meet the fast-evolving needs of Malaysia’s growing online community.
The partnership entails the development of a digital prepaid card, which will be made available to the public in the first half of this year to enable access for more young Malaysians to make digital payments online and in-app across merchant locations that accept Mastercard worldwide.
The card will be designed for those who prefer the convenience of online transactions when making their purchases. Customers can sign-up, activate and use the card all within a single mobile app as part of a simple, safe and secure end-to-end digital experience.
This partnership is one of the many ways Digi is innovating to provide better digital experiences for its 11.8 million customers. It sees the company innovating beyond its core services and into the payments space to bring the benefits of cashless payments to all Malaysians.