The e-wallet subsidiary of Malaysia’s sole electronic payment system for toll expressway and highway operators is exploring the possibility of integrating Islamic financial services into its platform, making it one of a handful of digital wallets in the country to do so.
“We are already in talks with a number of players looking at how we can infuse Islamic fintech products,” TNG Digital CEO Syahrunizam Samsudin told IFN Fintech, stopping short of disclosing specific details but affirming that Islamic fintech is something it aspires toward. “It is really about whether we can match our consumers with the right product.”
With over 4.2 million users in a nation of almost 32 million and about 70,000 merchants registered under its e-wallet platform, Syahrunizam is confident that the current 8% e-wallet penetration rate would grow over the next one to two years as the price points for broadband internet and smartphones drop. Compounding the optimistic projection is the strong push by regulators and the government for the Southeast Asian nation to become a cashless society.
“Let Malaysians have a cashless platform first, then hopefully over time, they will be more comfortable putting [money] into e-wallets,” Syahrunizam said, noting that cashless platforms include credit and debit cards as well as Touch ‘n Go smart cards.
Research shows that almost half of the Malaysian population (46%) are concerned about security measures and fraud risks associated with digital payments. Apart from undertaking public awareness and education measures to familiarize the everyday Malaysians with mobile payments, the Touch ‘n Go eWallet recently introduced a money-back guarantee policy for any unauthorized transactions, making it the first mobile payment provider in Malaysia to offer such a service.
TNG Digital is focusing on making its system and service more robust. And going against the grain of e-wallets’ tendency to gravitate toward digital banking services, the Malaysian firm is likely to channel its resources into building its existing e-wallet infrastructure.
“It is too early to tell and we are waiting for the [digital bank guidance] draft to evaluate opportunities,” Syahrunizam said in response to whether the digital wallet has any plans to evolve into a virtual bank. “We feel that with our current platform, we have a lot of opportunities to provide financial services using our technology.”
As far as Shariah compliant financial services are concerned, TNG Digital sees several opportunities including in the savings space, although Syahrunizam did caution: “It is still early days, and we need to see how best to deliver those products in a way that is different from a traditional Islamic bank. We always challenge ourselves to provide a better user experience.”