If you’ve been following our blog and our “Malaysians on Malaysia” series here at Oppotus, you may be aware that we’ve been paying special attention to the e-wallet landscape in Malaysia, bringing you insights and analysis regarding the way Malaysians have been using e-wallets as the year goes by.
With 2019 coming to a close, e-wallet usage is set to become higher than ever in Malaysia as even the federal government has plans to strongly encourage the usage of e-wallet usage and cut down cash circulation. One way that this will be done is through the launch of it’s e-tunai Rakyat programme this coming January which will bring a RM450 million digital stimulus to the e-wallet landscape of Malaysia. As such, we thought that this would be a good time to take a closer look at the current trends and behavior surrounding e-wallets amongst Malaysian consumers.
The first thing to note is that although this was a breakout year for e-wallet usage in Malaysia, we actually did not see many new e-wallets being introduced this year. Instead, we saw an increase in the usage of major e-wallets that have already been available to Malaysian consumers since 2017 and 2018, such as Boost and the Touch ‘n Go e-wallet.
As we come to the end of 2019, we see that the rate of e-wallet usage is higher than it has been in the past 12 months, currently sitting at 27% (amongst 18 year olds and above in urban cities of Peninsula Malaysia). This is likely to increase once we get round to our next report, thanks to the many seasonal promotions from vendors and e-wallets that are usually on offer during the holiday season. With numerous commercial festivities taking place towards the end of the year such as 11.11, Christmas and New Year’s, there’s going to be plenty of occasions for consumers to celebrate with shopping and dining – both of which are activities that make up a large proportion of e-wallet usage amongst Malaysian consumers.
Of all the e-wallets that have been introduced to the Malaysian Market in recent years, Boost has continued to be the most popular option for Malaysian consumers that utilise e-wallet services, with more than half of e-wallet users using Boost throughout the year, peaking at 74% in Q2 2019. The next 3 most popular e-wallets are Touch ‘n Go E-wallet, Maybank E-wallet and GrabPay, all of which have become significantly more popular since the start of the year, experiencing an increase in usage of around 40%.
It’s important to note that these figures are based on usage by consumers, rather than other metrics like number of downloads or number of accounts created – which are different in context.
Taking a closer look at the demographics of Malaysian e-wallet users, we find that e-wallets are most commonly used amongst the 25-34 age group, with the 35-44 age group also having a solid percentage of e-wallet users at 25%. We can also see that e-wallet usage is more common amongst those who are working in PMEB roles – people who might be more likely to be in the know regarding technology trends and also in a better position to take advantage of the benefits that e-wallets offer to consumers. As such, it also follows that e-wallet users have a slightly higher income on average compared to non e-wallet users.
Now we come to the user profile for each specific e-wallet brand. Touch ‘n Go E-wallet and GrabPay are both significantly more popular amongst consumers in the Klang Valley compared to the other e-wallets. This is likely due to the increased demand for Grab’s ride hailing and food delivery services in the populated city areas of the Klang Valley, while those who are using Touch ‘n Go e-wallet might be doing so mainly for the PayDirect feature which allows them to conveniently top up their e-wallet for usage as payment at the numerous tolls that one encounters while driving around the Klang Valley.
The average age of e-wallet users is around 34 years old, but Boost and GrabPay users tend to be on the slightly younger side compared to the other major e-wallets.
The usage of Boost and GrabPay is also noticeably higher amongst female consumers compared to male consumers, while Samsung Pay users are predominantly male.
Boost has the highest percentage of Malay users, while the other major e-wallets have a higher usage rate amongst the Chinese compared to Malay and Indian consumers.
Finally, we see that Touch ‘n Go e-wallet and GrabPay users have a higher income than average compared to the other e-wallets.
All things considered, these insights may or should lead to different targeting and merchant strategies amongst the brands.
Towards the end of 2019, bill payment and F&B continue to be the most common use cases for e-wallets. The ability to use e-wallets for bill payments has been a godsend for consumers thanks to the convenience that it brings to an otherwise tedious but necessary chore, while the numerous benefits and promotions for e-wallet usage when it comes to purchasing food and drinks has encouraged more customers to use e-wallet for their purchases more frequently.
The usage of e-wallet to purchase groceries has decreased since the start of 2019, while delivery services have become three times as popular amongst e-wallet users in that same amount of time.
In F&B purchases, coffee chains are the most common place for e-wallets to be used, with bubble tea chains and cafes being the next most common outlets. Boost remains as the most popular e-wallet for F&B purchases, but Touch ‘n Go E-wallet and Grab Pay have both become more popular for F&B payments since the start of the year. This trend is seen to be predominantly happening largely in the Klang Valley region for now, and it’d be interesting to see this spread to other parts of the country.
For bill payments, Boost and the Maybank QR Pay are the most commonly used, which may also explain why Boost is the most popular e-wallet while having a higher usage rate among female consumers. Out of all the e-wallets available, Boost has a vast range of partners that enable it to be used to pay bills for various services including utilities (e.g. SESB, Syabas), telecommunications (e.g. Astro, Celcom, U Mobile) and even tax, insurance and loan payments.
Since taking care of chores and duties such as bill payments is done more often by men than women in households (53% vs 47%) and bill payment is the most popular usage for e-wallets among Malaysian consumers – something made extremely convenient with via Boost, it will be interesting to see if this contributes towards a rise in the percentage of male e-wallet users as time goes on and more consumers take up e-wallets as a way to settle their bills.
Surprisingly, Touch ‘n Go E-wallet now has a higher usage rate than Boost when it comes to purchasing groceries. GrabPay is also much more commonly used here compared to the start of the year. The usage of e-wallets to purchase groceries in Supermarkets and Hypermarkets is relatively common now, but usage in mini-markets is currently lagging far behind.
Similar trends can be seen when it comes to reloading and other key areas of e-wallet usage. Boost, Touch ‘n Go E-wallet and GrabPay are generally the most popular e-wallets in these areas. It’s also worth noting that bigpay is more commonly used when it comes to these areas, compared to it’s relatively uncommon usage in the most popular areas of bill payment and F&B.
And that wraps it up for our year end look at e-wallet usage in Malaysia! With more consumers starting to embrace the benefits of e-wallets, it will be interesting to see what new promotions and features become available as the e-wallet landscape becomes more and more competitive in 2020. We can also expect a significant increase in the number of new Malaysian e-wallet users in the early months of 2020 thanks to the RM30 of e-wallet credit that is being offered to Malaysians as part of the e-Tunai Rakyat initiative from 15th January to the 14th of March.
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