It’s time to wave goodbye to traditional methods of payment, and make way for “e-wallets”! A simple app which resides in your smartphone, e-wallets can be topped with money and then utilized to pay for goods and services at your demand.
When Chinese commerce giants Alibaba and Tencent began to push for the adoption of e-wallets, the rest of Asia quickly followed suit, and rightly so. E-wallets confer a whole host of benefits that allow its users to perform immediate payments without the need to carry large amounts of cash at any given moment.
Although cashless payments currently comprise a mere 20% of total payments in our country, the evidence indicates that this is a trend that is likely to continue. E-wallet service providers are also in an unprecedented position; their companies have the ability to function as “digital banks” in that they can provide loans, money-market funds, and other wealth-management products at a competitive rate.
For Malaysia, however, the challenge to adopt e-wallet technology is proving to be an uphill battle. Malaysian consumers have expressed their preference in using cash or bank cards, and banks have noted marginal success in promoting a cashless revolution.
“For mobile payments to be successful, one needs a combination of factors, including interest and eagerness from customers to use mobile as a device to pay, a broad merchant network availability where customers can pay and network effect that can ensure a seamless user experience,” states CIMB Group Holdings Bhd.
Some bankers have quipped that Malaysian banks’ attitude stems from the fact that they could potentially be at a loss if E-wallets were to gain traction in the country. A mere five Malaysian banks and as few as 28 non-bank entities have been granted e-money licenses issued by Bank Negara, whilst the majority remain partial to traditional methods of customer retention such as loyalty and petrol cards.