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    • Out in the West, mobile payments are dominated by NFC-based services, such as Apple Pay and Google Pay. Here in Malaysia, the mobile payment battle is being fought via a different approach - QR codes. Though QR codes may not seem as fancy or cool as tapping your phone to a card reader to make a transaction, this is the technology Malaysia has chosen for it's e-wallet infrastructure, and I for one think it's the right decision.

      QR codes may seem low-tech compared to NFC, but this is actually a good thing as it makes mobile payments more accessible for both merchants and consumers. Merchants don't need to rely on an NFC-enabled card reader, all they need is a QR code which they can simply print out and put on display. This makes mobile payments widely available even in places that don't accept card payments, such as roadside hawker stalls, cafeterias in universities or hospitals, convenience stores, and food trucks. As for consumers, since QR codes only need to be scanned by their smartphone cameras, literally any smartphone can be used for mobile payments. This isn't the case with NFC-based payments as only phones with NFC can be used, effectively eliminating a large group of consumers who can only afford low to mid-range phones which may not come with NFC. Not to mention the fact that major NFC-payment services like Apple Pay and Google Pay aren't even available in Malaysia. Samsung Pay is available here, and it has the added advantage of MST-based transactions, but this service is only available to a number of smartphones, which limits its usefulness. Ultimately, QR codes for mobile payments are the best option for both merchants and consumers, which is why this method is so popular around the country.

      Having set the scene, I want to share with you who are the main e-wallet services providers in the country, and how they are all vying for top spot in this fiercely contested new battleground in Malaysia.

      Grab

      Some of you might have heard of Grab, but for those of you who haven't the main thing you need to know is that this is the company that kicked Uber out of the region. That should give you a picture of how big this company is. Grab started out as a ride sharing service just like Uber, but they introduced their own e-wallet called GrabPay in the middle of 2018. As a ride sharing service, having an e-wallet makes sense. It allows you to load prepaid credit into your account to make paying for rides more seamless. Grab just took this concept and offered it to merchants outside of its driver network. So now, Grab users can pay for their rides and countless other goods and services from third-party merchants via the GrabPay platform. Grab is my favourite e-wallet for this reason, as well as the rewards. Every time you pay for goods or services using GrabPay, you are given reward points. These points can then be used to redeem discounts on Grab rides, or be exchanged for gifts from participating merchants (like a free donut from Dunkin Donuts). The integration between the ride sharing service, its e-wallet, and third-party merchants, as well as the way reward points can be collected and spent throughout this network is why Grab is my favourite e-wallet. But there's a lot of competition, and it's heating up.

      Touch 'n Go

      Touch 'n Go (TnG) is actually a very old service in Malaysia, having been launched more than 20 years ago. It was initially just a prepaid card which allowed consumers to make cashless transactions at highway tolls. Eventually, the use of the card spread to include public transportation as well, like trains and buses. Then it spread even further, allowing consumers to use it for transactions in some convenience stores too. You can also use the prepaid card to pay for parking in selected shopping malls. In the end, the switch to a mobile e-wallet just seemed inevitable.

      Though the e-wallet app was actually launched some months ago, it wasn't until December of last year when the app really hit its stride. A partnership with two of the most popular malls in the country meant that the number of participating merchants who accepted transactions via the mobile app skyrocketed. Not only that, the company also offered free credit for new users who signed up at their promotional booth during the holiday season last year. The e-wallet has a lot of potential, but at the moment the merging between the physical card and the mobile e-wallet is a little messy. You can link your physical card to your app, but they each have separate funds (meaning you'll need to top-up both separately if you use both). Current tests are underway which allow the card to be used at tolls but instead of the prepaid balance in the card being deducted, your funds from the e-wallet will be deducted. This will allow users to maintain their funds in the app and use the card at tolls (and presumably other locations as well) without needing to worry about how much balance is left in it. This is the end goal and it will make the e-wallet much more appealing to use. Just keep your e-wallet topped up, use your phone to make transactions at retail outlets, and use the card for tolls and public transport. Once this happens, I can see TnG becoming one of the most widely used e-wallets in the country.

      Maybank

      As you can probably guess by the name, this QR code-based e-wallet service is provided by one of the major banks of Malaysia. The QR code scanner is built right into the main banking app, so there's no need to install a separate app if you already use the bank's app for mobile banking (the bank also has an NFC-based e-wallet feature, but that requires you to download a separate app). The main benefit of this e-wallet is the fact that it comes directly from a bank itself, which means you don't need to worry about transferring money into a third-party e-wallet (like the two alternatives above). As long as you have funds in your bank account, you can use the e-wallet hassle-free. The only problem, is adoption. Despite being provided by a bank, support for this e-wallet by business merchants is severely lacking. It's the classic catch-22 conundrum. Businesses don't see any benefit of supporting an e-wallet with a small user base, but users won't see any benefit of using an e-wallet that isn't widely supported, especially when there are other more widely supported alternatives. On the merchant side of things, it seems Maybank does try to make it easy and convenient for businesses to use their QRPay platform, but the lack of points, vouchers, or any sort of reward for users is a problem which Maybank needs to figure out, and fast. Otherwise, it'll get left behind.

      Those were three of the players in this battle for Malaysia's e-wallet industry, but there are plenty more. I highlighted these three because they are the ones I've used myself. Boost is a very popular e-wallet which has a lot of features, one of which is the ability to split a bill with your friends. FavePay is another e-wallet which actually originated from a service dedicated to offering deals to consumers in areas such as shopping, travelling, F&B, beauty, etc. Then we have the less popular e-wallets like Razer Pay, WeChat Pay, and Alipay.

      With more than half a dozen competing services in the country (I don't know if I missed any), it's clear that there's going to be a lot of battles being fought for Malaysia's digital wallets. Regardless of who wins (I'd be happy with multiple winners even), this is a great sign for the future of Malaysia. Usually, I'd consider the country to be a little behind when it comes to technology, but the transition to a cashless future seems very bright, and I'll keep a close eye on any and all developments moving forward.

    • When I was in KL, I remember visiting an eight story mall and being surprised to see at the center of the ground floor an ice skating rink.

      I would think that Boost’s group bill pay option, which automatically calculates and splits your bill with friends, is a strong selling point for mathaphobic adults.

      Grab’s expansion from ride sharing to banking services like GrabPay makes economic sense: instead of paying transaction fees to a bank, Grab has become its own bank.  (In our community, the largest regional bank is owned by the largest regional grocery chain.)

      @JazliAziz , is there a specific reason why Alipay isn’t more popular?  I know that Alibaba is the equivalent of Amazon (or perhaps more accurately Ebay) in China, but I don’t have a sense of its presence in Malaysia.

    • Thanks for a fascinating article. I also agree that Malaysia might have a better idea than we do in the West. I have never been fond of Apple Pay. Just seems like another entity thrown in the middle of the pay cycle.

      I especially like the idea of it coming right out of my bank account instead of worrying about adding money to it.

      And I love the idea of how widespread it can be.... from individuals at a garage sale (I am assuming) to mainstream merchants.

    • When I was in KL, I remember visiting an eight story mall and being surprised to see at the center of the ground floor an ice skating rink.

      You must be talking about Sunway Pyramid. That's one of my favourite malls. Also, one of the most tech savvy. There's another mall with an ice rink too, though not in the city, called IOI City Mall. Not sure if there are any others.

      @JazliAziz , is there a specific reason why Alipay isn’t more popular?  I know that Alibaba is the equivalent of Amazon (or perhaps more accurately Ebay) in China, but I don’t have a sense of its presence in Malaysia.

      I think it's simply because there are other solutions which offer better value to consumers (such as those I mentioned in this post). As for its comparison to ebay (or Amazon), we also have our own online marketplaces for shopping, and they're locally based. So I don't think there's any benefit or reason for people to use Alipay or Alibaba in Malaysia.

    • Great post. Very eye opening. Sometimes the simplest solution really is the simplest solution. Come to think of it, whenever I shop at Whole Foods my iPhone flashes a QR code so I can be recognized as a Prime member and maybe get a discount, and they can big data me and know where I am. Bastards.

      Had to look up Grab. Never knew about them. Holy shit (tahi suci?).

    • Holy shit (tahi suci?).

      While that is the correct translation, we never say it in Malay, only English. It sounds so funny in Malay

    • Fascinating! I had no idea QR codes were being used so extensively for payment services.

      It does seem a little bit less convenient than what I'm used to with Apple Pay, though. There are lots of services competing for your attention, so it seems like it could be hard to find the QR code for the one you actually want to use. It also looks like you have to open a specific app, then use it to scan the code; is that correct? I like that with Apple Pay I can just press my phone's side button two times and then hold it near the reader.

      Do you know anything about how these payment servicers handle fraud? For instance, if someone gets access to my GrabPay account or steals my phone and drains my prepaid account, would I have any chance of getting that money refunded? What about with Maybank where the funds come from my checking account?

    • It also looks like you have to open a specific app, then use it to scan the code; is that correct? I like that with Apple Pay I can just press my phone's side button two times and then hold it near the reader.

      You're right, it's definitely not as easy to launch as Apple Pay since we need to unlock the phone, open the app, and launch the scanner function, but pros and cons I guess. The inconvenience of launching an app is offset by the convenience of scanning a QR code using any phone and the wide availability of the technology.

      Do you know anything about how these payment servicers handle fraud? For instance, if someone gets access to my GrabPay account or steals my phone and drains my prepaid account, would I have any chance of getting that money refunded? What about with Maybank where the funds come from my checking account?

      As for fraud, I'm not sure how things are handled. I've yet to see any reports of major breaches or even isolated cases, but I'm sure these services have protocols in place for such occurrences.

    • my credit card has 2% rebate for all purchase, capped at RM 50 per month. So by using any e-wallet, as long as I top up using my card, I'll enjoy the rebate. Good thing about e-wallet is that some small business that don't have credit card terminal actually support e-wallet. And I'll be able to use my credit card indirectly and enjoy my rebate by paying through e-wallet apps.

      Sadly it's not all roses and unicorn with e-wallet. Some inconsiderate people will hold up the line at the cashier because they didn't reload and always keep their balance at bare minimum. so everyone behind need to wait for that person to reload. It's even worst if his mobile data is slow. People should always estimate their bill and reload an excess of RM 10+ before queuing.

      And some apps like Boost and TnG is very slow in reloading. Boost server is slow, TnG is the slowest of em all, still need to input TAC to reload. Can't stand TnG slow reload process, end up using their auto reload function. The minimum setting is Auto reload RM 20 whenever balance is less than RM 20.