In the past years, eWallet in Malaysia has witnessed a significant transformation, with the emergence of numerous players competing in the market for digital payment solutions. As the market becomes saturated with various eWallet solutions, the need for collaboration and integration has become increasingly apparent. The move toward eWallet collaboration will allow businesses and consumers to benefit from the synergies created by these strategic partnerships.

What sparked the rise of collaborations?

The Central Bank of Malaysia (BNM) has been actively promoting the adoption of eWallets and is aiming to create a more robust digital payments ecosystem. As part of this effort, BNM has introduced regulations to foster competition and ensure interoperability among eWallet providers. However, since these providers operate within their own ecosystems, users often face limitations when transacting across different platforms. For example, someone with a GrabPay account might be unable to use it to pay for goods and services at a merchant that only accepts Touch ‘n Go eWallets.

Despite these challenges, the COVID-19 pandemic played a significant role in driving the adoption of digital services in Malaysia. The global health crisis has forced consumers to limit physical interactions, including traditional cash transactions. This move away from handing over banknotes and coins increased the demand for digital payment methods. 

Digital payment providers had to adapt quickly to meet this demand surge, which resulted in increased collaborations among the leading players in the industry. For instance, eWallet providers have joined forces with traditional financial institutions to provide financial assistance to businesses and individuals economically impacted by the pandemic. One such example is the biggest online retailer in the country, Shopee. It partnered with banks to offer consumers flexible and more affordable digital loans through its platform by introducing the ShopeePayLater option. 

The perks of strategic partnership in the eWallet industry

In this highly competitive environment, strategic partnerships can be a valuable asset for eWallet providers to gain a competitive advantage. By forming partnerships with other companies, they can offer their customers a more comprehensive range of services while also improving their efficiency and profitability. 

One of the key benefits of strategic partnerships in the sector is increased customer acquisition. By partnering with other companies, eWallet providers can reach new audiences they may not have been able to access on their own. For example, a partnership with a popular eCommerce platform could give a provider access to a large pool of potential customers already shopping online, providing low-hanging fruit for the fintech company.

In addition to customer acquisition, eWallet providers can improve their product offerings. Entering into a partnership with a digital remittance company could allow the provider to offer international money transfers to their customers. Having strategic alliances also helps the eWallet provider improve their efficiency and profitability through shared resources and expertise, which can lead to massive cost savings.

For instance, a partnership with a logistics provider could help to streamline the fintech’s delivery processes, while a collaboration with a data analytics company could help them better understand their customers and improve their marketing strategies.

Emerging eWallet trends in Southeast Asia

FavePay, an early player in the local eWallet scene, recognised the importance of collaborating with established payment platforms to scale and expand faster. One such collaboration was with Singapore-headquartered DBS Bank’s PayLah payment app, which already had a user base of 1.5 million in Singapore by 2018. 

To foster growth for both parties, FavePay and PayLah adopted a “co-opposition model,” enabling users of both eWallets to scan each other’s QR codes and accelerate user acquisition. After the launch of FavePay, other companies soon followed suit, rolling out collaborative eWallet platforms in the city-state. One example was Grab launching its GrabPay eWallet in hawker stalls, restaurants, and shops at the end of 2017.

In Malaysia, the public will soon be able to pay highway tolls using any digital payment provider, marking the end of Touch ‘n Go’s monopoly on the payment system. The Malaysian Highway Authority (LLM) is trying to ensure that it will be convenient for the public to embrace the online mode of payment. The public will soon be able to use any digital payment method, such as Touch ‘n Go eWallet, debit or credit card, Visa or Mastercard, or any other electronic payment system.
The rise of the cross-platform eWallet in Malaysia signifies a pivotal shift in the digital financial landscape, breaking the monopoly previously held by a few dominant players. By fostering strategic partnerships and integrating various eWallets collaboration strategies, stakeholders can enhance user experiences, facilitate seamless transactions, and promote inclusive financial growth. As these collaborative efforts gain momentum, the future of the eWallet sector in Malaysia looks bright, promising more significant innovation and enhancing the digital economy as a whole.