E-wallet boost for e-commerce

KUALA LUMPUR: The emergence of the electronic wallet (e-wallet) contributes to the further development of e-commerce and enhances the retail payment system by offering a fast, easy and secured payment process, according to the Ministry of Finance.
E-wallet promotes the usage of the electronic payment (e-payment) system, which supports the global move towards cashless societies, it said in the 2017/2018 Economic Report released in conjunction with the tabling of Budget 2018 by Prime Minister and Finance Minister Datuk Seri Najib Abdul Razak here today.
"Apart from using credit cards online, the use of e-wallet has gained popularity and is expanding fast. In particular, global mobile wallet transactions were valued approximately at US$594 billion in 2016 and are expected to reach US$3.1 trillion by 2022, growing at a compound annual growth rate of 32% between 2017 and 2022," according to the report.
E-wallet is essentially a digitalised version of the physical wallet where it stores users' information such as identity, email and home address, multiple credit cards and bank account numbers, as well as gift and loyalty cards in a secure environment.
According to the report, as of 2016, the average e-payment transactions for individuals stood at 97 compared with 49 in 2011.
Meanwhile, the launching of the Digital Free Trade Zone (DFTZ) in 2017 witnessed significant development in Malaysia's e-wallet market.
"This includes collaboration of Ant Financial Services Group, the operator of Alipay, with Touch 'n Go which is expected to transform the payment system landscape in Malaysia.
"The entry of global players into the Malaysian market will drive competition and encourage more players to participate in the e-wallet segment," the report said.
As the e-wallet segment evolves, enhancements and innovations are expected, particularly on the technological front, such as possibilities of e-wallet analytics.
It said e-wallet providers could leverage on data analytics and data mining for targeted marketing, given their ability to capture data by tracking and connecting users' actions across different services and retailers.
"This would allow retailers to give the relevant mobile offers and coupons to their customers. In addition, e-wallet providers could offer small credit or financing to the users, given their ability to access consumers creditworthiness and their consumption patterns.
"Adoption of data analytics will change the marketing strategy for businesses in the future," the report said.
As of July 2017, e-wallet providers in Malaysia, subjected to the Financial Services Act 2013 and Islamic Financial Services Act 2013, were Alipay, Visa Checkout, Masterpass, CIMB Pay and Samsung Pay. — Bernama