While there is a lot of attention in Indonesia’s mobile payment/wallet space, few regional observers are paying attention to Malaysia, where Ant Financial also operates an e-wallet JV with CIMB controlled Touch N’ Go (TNG).
In fact, while access to financial services in Malaysia is much more advanced than many other countries in the region (hence different opportunities for fintech), cash still dominated many of the retail transactions.
We did an overview of the major e-wallets in Malaysia earlier this year, now let’s do a deep dive into TNG.
TNG has a perfect combination of use cases for e-wallet: public transport and, in a country where many drives, highway toll. There are more than 20 million cards in circulation.
TNG also has a scheme with Tesco, where Tesco runs its loyalty programme Clubcard.
Of course, TNG Card users need to top up value into the card, through a network of more than 10,000 reloading points.
This has traditionally been a very good offline customer traffic driver.
The TNG e-wallet is developed by the JV between TNG and Ant Financial called TNG Digital. As a payment app, KYC is essential during registration:
You can then add your physical TNG card to the wallet:
There are different methods to reload the card through the wallet, including through offline Pins – a workaround but also a way for those who are used to top up offline to get more comfortable.
The experience is obviously much better than queuing at offline reload points, or validating the reload during TNG wallet’s initial phase. However, it is still relatively disjointed because of the steps involved – just read the Google Play Store comments to get a sense.
TNG Digital has been working to add payment points – now covering most of the highways in the Kuala Lumpur Metro Area (Klang Valley) and a few expressways outside.
It has also added an option for taxi drivers, with other urban mobility options ‘coming soon’.
Real inhibitors of adoption
There are a few million downloads of TNG Wallet app – a fairly decent achievement. There are some studies in the market citing security concerns etc. as the reason why ‘most consumers’ in Malaysia were reluctant to use the mobile wallet.
We are sceptical about this – in a country where infrastructure is already not bad, and fraud is controllable, the real blockers for adoption are usually the regulations, user experience, and lack of aggressive promotions.
For instance, TNG Wallet has a stored value limit of RM200 (US$48) and daily transaction limit of RM1000 (US$239) across all platforms. In comparison, ordinary Alipay users in China has a daily payment limit of CNY10k to 15k (US$1405-7026) depending on which bank you use – and the money is taken out of the bank account via direct debit.
Without direct debit, and even with auto-reload, user experience is often disjointed, limiting further growth of the wallet.
Also, compared to many of the leading Indonesian mobile wallets, TNG’s promotions are very modest.
These are the issues we are sure TNG is working hard to address – and we believe its use cases if used well, could be very powerful adoption drivers.
Ultimately, there is good infrastructure in Malaysia, compared with many other countries where innovative mobile products are often limited by infrastructure development. There are already many ways to encourage adoption – what goes next would be adding more use cases to the list, making users more sticky.
Of course, in such a competitive environment, a combination of frequencies, use cases and promotions (or at least two of these) is essential for success.