Ewallets in Malaysia: How to Enable Ewallet Payments for Your Business
Malaysia is the leading country in Southeast Asia for ewallet use. About two-fifths of Malaysians (or over 12 million people) use ewallets for payments, remittances, and shopping. Although there had already been operational ewallets since 2019, it was only in 2020 — at the height of the pandemic — that digital wallets in the country started to take off.
However, the adoption of ewallets among merchants in Malaysia tells a different tale, as many brick-and-mortar businesses still do not accept ewallet payments. Why should you add mobile wallets to your payment channels? How do you set up ewallet payments for your business?
Read on to learn what you can do with ewallets and how you can take advantage of mobile payments to grow your business.
What Is an Ewallet?
An ewallet is a software-based wallet that carries a user’s financial accounts such as credit cards, debit cards, and bank accounts. Ewallets are also known in other variations, like e-wallets, virtual wallets, and more commonly digital wallets. They let users pay bills, send and receive money, and shop online and offline.
Some ewallets are used to store various things a traditional pocket wallet would carry, including membership cards, plane tickets, e-coupons, loyalty cards, and business cards, among others. Ewallets may come in a form of application software for mobile and desktop devices (e.g., Boost, Apple Pay), an electronic device (e.g., hardware like USB for cryptocurrencies), or an online service (e.g., PayPal, Skrill).
Categories of Ewallets
There are three different categories of ewallets based on how people use them: open wallets, closed ewallets, and semi-closed ewallets. Let’s discuss the differences between these ewallets.
1. Open Ewallets
These are the most common ewallets because of their flexible functionalities. Open ewallets allow users to make payments in stores, in apps, or on the web. They can also be used to purchase goods and services at brick-and-mortar establishments.
Open ewallets are not just for payments and purchases as they can also be used to transfer funds. Senders can send money through the app, while recipients may receive the money either through the app or directly to their bank accounts. Boost is one of the leading open ewallets in Malaysia.
2. Closed Ewallets
Closed ewallets are not as common as open ewallets because they are used by and for specific brands only. They can be used to make payments only right through the brand’s mobile or desktop app. Closed ewallets are often used by retail chains and e-commerce platforms like Walmart (Walmart Pay), Amazon (Amazon Pay), Lazada (Lazada Wallet), and Shopee (ShopeePay).
3. Semi-closed Ewallets
Semi-closed ewallets are less flexible than open wallets but more flexible than closed ewallets. They cover a wider scope of making payments, allowing users to use their ewallets not just with the brand but also for other shops, usually associated with the ewallet issuer.
How Do Ewallets Work?
Ewallets using different technologies work differently. The most popular ewallets are mobile wallets, which typically use near-field communication, QR codes, and mobile number for transactions. Here’s how they work:
Mobile wallets of big tech companies like Apple Pay, Google Pay, and Samsung Pay use NFC for transactions. These app-based ewallets require the user’s NFC-enabled smartphone or tablet to be just a few centimetres close to an NFC-enabled point-of-sale (POS) terminal or ATM. Users can register their credit cards, debit cards, bank accounts, and mobile ewallet apps to these kinds of ewallets.
Mobile Payment Ewallets
Most ewallets are integrated with mobile payment apps. Such is the case with open ewallets, which let customers transfer funds and purchase goods and services right through the app. Mobile payment wallets in Malaysia often require mobile phone numbers and QR codes to make transactions, whether it’s paying for goods or transferring funds. Boost and Touch ‘n Go (TNG) are an example of mobile payment ewallets.
Adoption of Ewallets in Malaysia
One of the biggest trends in Malaysia during the pandemic is the surge of ewallet apps and ewallet usage. The number of ewallets in Malaysia had been consistently growing through 2019, but it was during the pandemic in 2020 that the use of mobile wallets had especially sped up. At the moment, there are over 50 ewallets in Malaysia, both local and international.
Meanwhile, the number of ewallets users has also been growing. A survey cited in a yStats.com report has revealed that as of June 2020, over 12 million Malaysians have incorporated ewallets into their lifestyle. This has placed Malaysia on top of the list for ewallet adoption in Southeast Asia. The number of smartphone users in Malaysia has been estimated to reach over 33 million by 2024, and with it, the number of mobile wallet users is expected to grow even further.
The biggest mobile payment service providers are Touch ‘n Go, Boost, GrabPay, and BigPay. In a September 2020 survey, Touch ‘n Go has emerged as the most preferred ewallet by 4 in 5 Malaysians, followed by Boost. During the pandemic, ewallets in Malaysia went through a surge in the use of their services. The same yStats.com report has revealed that BigPay saw about five times growth in the number of remittance transactions, while Boost experienced double the value of weekly transactions in August, compared to December 2019.
4 Reasons to Use Ewallets
Ewallets in Malaysia are quite popular among users due to their flexibility and convenience. But as a merchant, you have a lot of reasons to include ewallets in your roster of payment channels. Here are some of them:
1. Ewallets Are Widely Accessible.
Malaysia has over 30.41 million smartphone users, of which are about 12 million people using ewallets, putting Malaysia at the forefront of ewallet adoption among Southeast Asian countries. As a business, it only makes sense to take advantage of this massive user base of ewallets. If you already have a POS terminal in place, adding mobile contactless payments is definitely a no-brainer.
2. Ewallets Are Cost-effective.
The cost to enable ewallet payments is fairly low. Merchants do not need to bankroll anything expensive just to get them. Most smartphones are equipped with NFC and QR code capabilities, which means there is no need for additional infrastructure to enable mobile payments. As a merchant, all you need is a QR code, a mobile phone, or a POS terminal to start accepting ewallet payments.
3. Ewallets Offer Unbeatable Convenience.
One of the best things about using ewallets is the unparalleled convenience it brings, not only for customers but also for merchants. With ewallets, the checkout process becomes smoother and faster with less friction. Merchants just have to wait for the payment to go through after customers scan or hover their smartphones at the point of sale. Unlike using cash and cards, there will be no more physical interactions and no typing of PIN codes or passwords. If you are already using a POS terminal, you can simply add mobile wallets as another payment acceptance mode.
4. Ewallets Provide Better Security.
Ewallets offer better security for both your and your customers. Whether you use NFC or QR code mobile wallets, mobile wallets are harder for thieves and phishing scammers to exploit. NFC, for example, requires close interaction to transmit data between two devices, which makes phishing nearly impossible.
Meanwhile, QR codes can handle an enormous volume of data, which means they can be encrypted really well, making a QR code impossible to be copied and passed off as the real one. In addition, QR codes are equipped with password protection and fraud detection capabilities. Rest assured your customers can transact with a peace of mind and get a positive experience doing business with you. In return, they could become your repeat customers, which means more money coming in.
Top Ewallets in Malaysia
There are over 53 ewallets in Malaysia from both local and international companies, but you don’t have to add all of them to your roster. Here are some of the top ewallets in Malaysia:
Boost is a home-grown mobile wallet app with over 8.5 million users and over 200,000 merchant touchpoints across the country, including 99 Speedmart, Telekom Malaysia, SYABAS, Shell, TGV Cinemas, Dahmakan, and DBKL Parking. It is popular among users for its cashback system, enabling them to earn cash incentives for their purchases. Boost allows customers to top up their mobile prepaid credits, scan to pay, shop online, and pay bills. Merchants can take advantage of Boost’s user base by adding it to their payment channels.
2. Touch ‘n Go
Touch ‘n Go is another popular local ewallet boasting over 9 million users and over 280,000 merchant outlets nationwide, including 7-Eleven, Family Mart, and Tesco. TNG is most popular for contactless, no-queue payments at toll plazas and street parking as well as at closed-loop highways. For merchants, the endless deals and promotions the ewallet offers are a great opportunity to draw new customers.
3. Samsung Pay
Samsung Pay uses NFC and its proprietary Magnetic Secure Transmission (MST) technology to make transactions at the point of sale. It is, however, exclusive for Samsung device owners. The good thing about Samsung Pay is that customers can use it at any POS terminals. Unlike other NFC ewallets, Samsung Pay does not hold any funds; it can only store payment card information. In addition, Samsung Pay enables customers to store loyalty cards.
For merchants, the MFT mechanism allows Samsung mobile devices and smartwatches to copy the magnetic stripe on a credit card, so there will be no additional expenses for you when you get this payment channel. Samsung Pay also works with Boost.
PayPal is an online payment service boasting over 286 million users worldwide. Despite the huge number of Malaysians using PayPal, it is not smart to use it for mobile payments in Malaysia for both merchants and customers due to high transaction fees and merchant discount rates.
Other common ewallets in Malaysia include Setel, CIMB QR Pay, Maybank E-wallet, AEON Wallet, BigPay, Lazada Wallet, RazerPay, FavePay, GrabPay, WeChat Pay, and AliPay, among so many others.
How to Get Ewallet Payment for Your Business
The most common ewallet used for payments are mobile wallets. There are several ways you can get mobile payments in Malaysia for your business. Here’s how you can set up your own ewallet payment:
1. NFC Payments
To set up NFC payments, you can get your own POS terminal from a merchant acquirer and start accepting mobile contactless payments from your customers. If you are currently using an NFC-capable terminal and you want to add a specific ewallet to your payment options, just let your acquirer know so they can enable it for you.
2. QR Code Payments
To set up QR code payments, you can sign up for a mobile wallet like Boost. Using mobile wallets are cost-effective since you will only need a QR code and a mobile phone to operate, which your acquirer will provide. Alternatively, you can generate your own QR code using platforms like PayPal, but transaction fees imposed on such platforms can cost a lot.
Merchants Using Ewallets in Malaysia
Thousands of merchants in Malaysia are already enjoying the perks of using ewallets. Here are some of them:
Food & Beverage
Shopping & E-commerce
Entertainment & Online Services
One thing these businesses have in common is that they are all using Boost, a wallet issuer and a soon-to-be VIA™ alliance partner. Learn more about the perks of VIA™ alliance partner merchants.
How VIA™ Alliance Can Help You Get More Customers with Ewallets
VIA™ is Asia’s first cross-border mobile wallet alliance with millions of existing customers under its wallet issuers and merchant acquirers. In what way VIA™ can help you grow your business? Here are some:
1. VIA™ Gives You Access to Millions of Existing Customers.
Most home mobile wallets are often limited to local shops only. Some can do cross-border payments but coverage tends to be too limited. The VIA™ alliance partners have huge customer bases that add up to over 100 million customers spread across the Asia-Pacific. Therefore, becoming a VIA™ partner merchant enables you to get access to these user bases when they travel to Malaysia.
2. VIA™ Offers Lower Merchant Discount Rate (MDR).
The cost to accept debit and credit card transactions is typically set at 1% to 3%, which can be costly especially for small and medium-sized businesses. Joining the VIA™ alliance entitles merchants to a lower payment processing fee. Therefore, merchants have more leeway to reduce their business cost and increase their bottom line.
3. VIA™ Brings Various Ewallets into One Platform.
There are so many mobile payments in Malaysia. Accepting all of them can be impractical and expensive. Becoming a VIA™ partner merchant lets you accept multiple ewallet payments using one single integration and one unified process. Therefore, both merchants and customers may enjoy a seamless and convenient checkout process.
4. VIA™ Can Help You Grow Your Business.
There’s no other platform for mobile wallets like VIA™. It has partnered with dozens of wallet issuers, merchant acquirers, and government agencies in the Asia-Pacific, and it is growing fast. At the moment, VIA™ has partners in Singapore, Thailand, Hong Kong, Japan, and soon Malaysia and Indonesia. Therefore, joining the VIA™ alliance opens up more business opportunities.
Watch how VIA™ works:
Malaysia is the fastest-growing country in the region for mobile payments. Parallel to the increasing number of ewallets in Malaysia is the number of users. Ewallets have become the preferred mode of payment for many customers since they are more convenient than pocket wallets, and they bring more perks.
As a merchant, you can expand your business’s reach by adding ewallets to your roster of payment methods. Joining the VIA™ cross-border mobile wallet alliance can help boost your revenues and make your customers’ experience faster, smoother, and more convenient.