In Malaysia, coronavirus gave boost to e-wallets
In modern history, nothing has been quite as disruptive the ongoing coronavirus pandemic.
As of writing this article, more than one and a half million confirmed COVID-19 cases have been recorded in almost two hundred nations worldwide. Nearly eighty-seven thousand fatalities have been credited to the SARS-CoV-2 contagion, and the virus’ rapid spread has resulted in countless of individuals on being locked down in their homes.
In very early 2020, the Malaysian government had cooperated with three major digital wallet operators to dispense 450 million Malaysian ringgit among 15 million qualified residents, subsequently promoting the use of the technology. As the nation is still undergoing broad lockdown measures, this rollout appears to be an excellent prototype for other economic stimulus plans intended to keep the nation's economy above water.
Malaysian e-wallets now
Although the popularity of digital-wallets in Malaysia has remained modest and underreported over the last few years, the fundamental numbers aren't something to sneer at.
E-cash transaction averages have been steadily climbing and have already surpassed the 10 ringgit mark, going so far as to average 11.69 ringgit as the year started, based on the most recent data from Bank Negara Malaysia (BNM).
This is a rather steep climb, as the averages had not went above 5 ringgit in over 15 years, not since the nation's national bank BNM had changed its regulations, permitting nonbanking organizations to issue digital cash.
The most recent governmental stimulus had drawn in almost fifty different e-wallet companies to apply for the chance to be selected, however only three were picked. GrabPay, Boost, and Touch 'n Go. The decision can be interpreted by some as who the industry’s top players really are.
Digital wallets as an e-commerce solution
The coronavirus crisis has constrained buyers’ habits to drastically shift, and is now causing a flood of digital consumption no matter how you look at it – from e-commerce and non-contact deliveries to digital content creation.
Some notable examples include the March’s Lazada Birthday Carnival, which drew in over a million viewers, and a sudden spike in new TikTok users across Malaysia.
Given the fact that all stores considered non-vital by the government are temporarily shut down (at least their physical locations) and a vast number of individuals opt-in for remaining at home in order to maintain a safe distance from potential infection, online shopping and digital wallets have become leading industries.
Despite the fact that PC-led online banking has been a norm for some time, mobile shopping has experienced rapid development as of late, and the pandemic could play a major role in its ascent. This is particularly obvious in Malaysia, where the populace is uses mobile internet connections on an average of 4 hours every day, placing the nation in the top ten for mobile internet usage.
Post-pandemic digital retail
In principle, digital marketplaces of all sizes stand to gain something from the broad changes in customer behavior. Despite this theory not every retail sub-sector can be easily digitized, case in point, gas stations.
Malaysian residents have average about two vehicles per family. This translates to roughly nine vehicle owners out of every ten residents, transforming high-traffic gas stations into potential Petri dishes for the coronavirus.
However, these new difficulties put Setel, a Malaysian digital gas payment service, in an interesting position. Its contactless in-vehicle payment framework has just accumulated more than 1 million new clients in only a month post its launch earlier this year, and the startup doesn’t plan to constrain itself to the gasoline payments.
“[Our] next phase would be to allow the adoption of Setel in other convenience stores since our core strategy is to provide a seamless retail-on-the-go experience,” says CEO Iskandar Ezzahuddin. The team is already developing a drive-through convenience store concept, where customers can choose and pay for product as they exit the gas stations.
With over a thousand such stations across the country acting as distribution channels for the company, Setel could pioneer Malaysia's "new retail" disruption, driving other digital payment players to recreate comparative services throughout the industry.
The revolutionary e-banking permit
The coronavirus pandemic has uncovered how poorly equipped and stale Malaysia's banking industry really is. While the nation's banks hung tight for BNM to report stimulus plans, a native e-wallet player Boost had started a 150 million ringgit fund on its platform, in order to provide desperately-needed aid to over 135,000 micro, small and medium-sized enterprise that were confronting financial hardships.
This could end up being a turning point for digital payments, as e-wallets build more grounded connections through the support of their clients. These players have also demonstrated to be profoundly viable at distributing funds as a vital component of the Malaysian digital stimulus package, with in excess of 10 million ringgit claimed on day one of the program.
To put it plainly, a drawn out epidemic-fueled lockdown, combined with additional digital stimulus plans from the government, are sure boost the growth of digital payment firms who are happy to go the extra mile for their clients.
The coronavirus pandemic will be a definitive stress-test for many organizations, all the more so for startups who were already encountering instability before the first case was even reported. Yet, digital wallets with distinct offerings will progressively solidify their positions in the market, making the situation an ideal ecosystem for drawing in new businesses that are struggling to remain above water.