Part one of our feature focuses on what Fintech is already bringing to the table. We take a look at how e-wallets and digital payment services are bringing us closer to a cashless society.
The last couple of years have been exciting for those involved in the FinTech industry, with new advancements completely transforming the way technology has been integrated into global financial systems. Adoption of revolutionary technology often leads to revolution in the way society works, and it’s no different with the adoption of advancements in FinTech.
The advent of e-payment and e-wallet systems in the past couple of years has shown unprecedented and exponential growth, especially among tech-comfortable millennials who make up a large percentage of today’s workforce the world over. And with any new technology, where there is a large influx in user adoption, there is large potential for change in the way society operates.
MONEY ON THE MIND
Worldwide, leading the way in the e-wallets and digital payment industry are two of the biggest global players, WeChat Pay and AliPay, which sees more than 600 million active users thanks to high adoption rates in China’s fast-growing mobile payment scene. An estimated 47% of China’s population uses digital wallets as their preferred payment technique, making it the number one choice in the country, beating out the more traditional methods of cash and credit cards. In China, exclusive usage of e-wallets has become so widespread, that even street food vendors and night market sellers accept WeChat Pay and Alipay, breaking through the misconception that e-wallets can only be used at e-commerce websites and physical brick-and-mortar stores.
As is often the case, China operates on a different playing field than the rest of world, making them the exception in global trends, but it won’t be long before the rest of Asia, and eventually the world, catches up. According to a 2018 global payments study carried out by Worldpay, a leading global payment services provider, credit cards still reign supreme in North America for both e-commerce and POS transactions, while global trends put cash and debit cards as the preferred payment methods for physical sales, and e-wallets as first choice for e-commerce transactions.
LOCAL WINDS SHOW...
In Malaysia, the big players are Boost and GrabPay, who have been leading the e-wallet sector since their respective launches in 2017 and 2018, with a few more notable apps such as the Touch n’ Go e-wallet and Fave also gaining a fair number of users over the past year. Most of these apps work on the reload-and-use model that prepaid phone line users will be familiar with, allowing control of how much you intend to spend. In the case of GrabPay, their expansion into launching a fully fledged digital wallet was obvious as their range of services grew out of just ride-hailing to include the likes of food delivery service, package delivery and in-store GrabPay-based payment system as a cheaper alternative to traditional card terminals.
“GrabPay is an integral part of our business and mission to enhance the everyday lives of Malaysians by offering a seamless and convenient payment option for their on-demand rides, food or parcel deliveries, instore and online purchases, or even hotel stays and movie tickets - all from one singular app, while earning points and rebates,” says Ooi Huey Tyng, Managing Director of GrabPay for Singapore, Malaysia and the Philippines.
Since the launch of the GrabPay e-wallet service in a year ago June 2018, the application has quickly become the widest used e-wallet in South East Asia, being one of the few services with a presence in six countries in the region. Ooi attributes their rapid growth down to being hyperlocal and partnership-driven. “With our operations running across the region, it requires us to be adaptable when it comes to working with regulators, partners and stakeholders to ensure that we are providing services that are tailored to the needs of each market. In Malaysia for example, we collaborate with Maybank to expand our offline acceptance to a more varied group of QR-enabled merchants as well as increase usage opportunities of the GrabPay wallet.”
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