Digital payments and fintech continue to dominate the headlines most days. From GrabPay, Go-Pay, Alipay and the list goes on, there is a lot of focus on the regional and global fintech players in the market.
However, looking at individual markets and geographies, you start to notice the main competition for these brands are often local-based players with good penetration with communities and specific locations.
Take Boost for example. This Malaysian fintech startup boasts that it is currently “the leading mobile wallet in Malaysia with the largest user base at 3.2 million and 45,000 online and offline touchpoints nationwide.”
Fresh off winning ‘Digital Disruptor of the Year’ at the Malaysia IDC Digital Transformation (IDC DX) Awards 2018, we spoke to Christopher Tiffin, CEO of Boost, to find out more about how they’ve grown the company to its dominant position and what we can expect to see in the future. Christopher had a lot to share.
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Malaysia is doing pretty well in the digital payments industry, compared to many Southeast Asian markets. Why do you think it has taken off so well in the country?
Bank Negara Malaysia (BNM), the Malaysian Central Bank, has been an important contributing factor in the rapid growth of the digital payments industry in its move towards a cashless economy and society. One of the key things that Malaysia focused on was security to greatly reduce fraud, thereby cementing consumer confidence and merchant trust in digital payment systems. Besides that, other policies were put in place, for instance, to reduce cheque circulation in the form of higher fees while reducing transaction fees for digital payments to foster adoption.
For Boost, in particular, we feel the reason digital payments via our e-wallet have taken off well is simply because of our focus on solving customers’ pain points. We looked at traditional cash-based transactions and found a way to simplify the customer experience. In addition, we’ve also engaged in raising awareness and educating customers as well as merchant partners on cashless payment adoption, which was key in creating relevance.
Where would you rate the potential of the Malaysian market compared to markets like Singapore, in terms of maturity, and Indonesia, in terms of sheer market size?
Comparing Malaysia to Singapore or Indonesia is similar to comparing apples and oranges. Each market has its own unique regulatory frameworks along with different dynamics such as mobile phone penetration, demographics, customer behaviour and pain points, social dynamics, economic factors, technology evolution and more.
As a simple comparison, Indonesia has a huge population but isn’t very highly banked. Conversely, Singapore has a smaller population as well as geographical size but is highly banked. Malaysia, on the other hand, is highly banked at over 90% of people over the age of 15 having a bank account. However, in Malaysia, access to credit is only at 30% of its banked population which gives plenty of room for an e-wallet like Boost to grow.
Where do you see growth coming from in the Malaysian market in terms of boosting digital payments?
There’s plenty of growth potential in Malaysia. We see it coming from the digitization of traditional cash-based products and services such as F&B, retail, fashion, bill payment and public transport, to name a few. Customers are looking for greater convenience in their day-to-day transactions and we are working hard to bring this to them in an easy-to-use and secure platform.
Some people in the industry seem to believe that the mobile wallet market is oversaturated at the moment. With players like Grab also gaining market share and the eventual entrance of Go-Jek, do you think a market like Malaysia can support so many wallets?
We believe in the next 18 to 24 months there will only be 3-5 main e-wallets in the market with a few more niche wallets.
At the same time, we don’t see more e-wallets entering the market as a bad thing. We need to accelerate adoption and customer behaviour change. With more wallets entering the market, this helps to expand the ecosystem and drive the cashless payment agenda. However, collaboration is key. At the end of the day, our main competition is cash and we need to work together with the other key players through partnerships.
Where do you see the biggest threat for Boost coming from? Is it consumer fickleness, competition or technological disruption?
Fickleness stems from a product not being relevant enough to change customer behaviour. When you’ve successfully created a great experience for the customer, we will see less fickleness and stronger adoption. To do this, you need to create a lifestyle experience, as opposed to the e-wallet being just a functional payment tool.
Technology is constantly evolving but it is only an enabler. If you have the right experience for the customer at the front-end, it doesn’t matter what you have at the back-end as long as it’s functional, well designed and secure.
This front-end is what we’re focused on to create the best lifestyle experiences for our customers and increase the relevance of our e-wallet for our customers to use daily thus increasing stickiness.
What can governments do to help improve digital payment adoption, because they are generally supportive, but do you feel that their investment and current infrastructure is sufficient?
The digital economy is key to the future of Malaysia and we can be a big driver towards achieving financial inclusion for the population. To achieve this, there needs to be an evolution of the current legislation, national policies and standards as well as potential tax incentives to lower cost and make it affordable for licensees and consumers. With the support of regulators, relevant ministries and with the right amount of communication and discussion, we believe governments will continue to be key facilitators in growing digital payment adoption.
What advice would you give a young entrepreneur looking to enter the FinTech space in the region?
Dream big, start small. Entrepreneurs should always keep it simple, understand their target customers and truly understand the pain points. They shouldn’t over think or over complicate their product.
The retail disruption in the region is already happening
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