Nielsen sees security concerns as main barrier to e-wallet adoption

  • Only 8% of Malaysians use e-wallets, security cited as top concern
  • Touch ‘n Go e-wallet introduces money-back guarantee policy


TNG Digital chief risk officer Teh Huey Tzi (left), with TNG Digital CEO Syahrunizam Samsudin

E-WALLET adoption in Malaysia is still at its infancy. According to the Nielsen Payment Landscape Report, while 67% of Malaysians use some form of cashless payment (with debit card and online banking being the primary method, at 63% and 57% respectively), a mere 8% of the population uses mobile wallets as a means of payment.

The main barrier, it seems, is security. As the report points out, 46% of non-users point to security concerns as their biggest barrier to giving e-wallets a try. When it comes to perceived security concerns, up to 59% believe that e-wallets can lead to credit and debit card fraud, while 38% are concerned about missing transactions.

Thirty-six percent of those surveyed worry about fake websites that are masquerading as being from mobile wallets. Thirty-nine percent are concerned about the leaking of banking details.

Meanwhile, 30% are afraid that mobile phones may be stolen to make purchases. Other concerns include malware and software issues, as well as concerns regarding data breaches.

What’s going to help assuage these concerns? Better security features, of course. According to Nielsen’s report, 62% would consider biometric identification as a feature that improves trust, while 56% would like One Time Passcodes (OTPs) – which are in use with credit and debit card transactions – to be included. 

Meanwhile, 38% would like to see Two Factor Authentication be part of e-wallet security features, while 27% wish that payment info be stored locally, and not on company servers.

Money back guarantee the answer?

The thing to note about e-wallets is that local players – all 41 of them – are actually governed by Bank Negara Malaysia, and thus subject to stringent regulations and rules regarding data protection and security.

This was pointed out by TNG Digital chief risk officer Teh Huey Tzi, who was speaking on a panel discussing Nielsen’s report in conjunction with the announcement of Touch ‘n Go e-wallet’s money-back guarantee policy.

“Consumers today expect convenience and security to go hand-in-hand with mobile payments and that’s exactly what we are enabling with the money-back guarantee policy,” she says.

“Apart from the multi-factor authentication process, our backend system also applies Artificial Intelligence (AI) that works to detect and mitigate any potential unauthorised activities. We are easing their transition in adopting and embracing a fully digital lifestyle by removing their doubts on security when they transact using our e-wallet.”  

All Touch ‘n Go e-wallet users are eligible for the money-back guarantee, though they must first verity their account through the Account Verification process (or eKYC process).

“Once an account is verified, the money-back guarantee protection will be activated with an e-wallet protection shield icon being visible on the edit profile button. If users find that they are being charged with unauthorised transactions in their e-wallet account, they can click on the money-back guarantee feature in the app,” adds Teh. 

Users will also need to fill up a form, which will require proof of receipts or transactional documents. Upon submission, the e-wallet team will investigate and if the claims are proven legitimate, refunds will be processed and reimbursements will be made within five working days.

Convenience: the next factor

Security isn’t the only factor behind people shying away from mobile wallets. Nielsen’s report also found that 38% of Malaysians simply believe that it’s much easier to pay by cash, while 31% do not understand how mobile wallets work, and thus much prefer to wait and see.

Nielsen sees security concerns as main barrier to e-wallet adoption “Our study showed that Malaysians still prefer to pay in cash for regular, everyday expenses such as buying groceries or dining out,” says The Nielsen Company’s managing director of Consumer Insights – East Zone, Arslan Ashraf (pic, right).

To be more specific, Nielsen’s study found that 34% of respondents aged 45 to 54 prefer cash-on-delivery (COD) while doing online shopping, while 28% use debit cards while eating out. Cash also dominates low value expenses – Nielsen notes that cards are only used for purchases above RM50. For regular expenses, one in three still pay for utilities with cash.

Convenience is cited as an issue here.

During the panel discussion, panellist Ibrahim Sani, who is Astro Awani lead business editor and executive producer, notes that there may be too many e-wallet players in Malaysia, and that consolidation of these providers may help.

Arslan adds: “In order to drive adoption among consumers, e-payment providers must address the need for convenient payment methods, while also inspiring confidence in the safety and security of digital wallets. We hope that today’s dialogue has provided deeper insight on the current payment landscape, along with a better understanding of the drivers and barriers to the adoption of digital payments.”

Addressing some issues

On the subject of consolidation and convergence, one solution could be in the horizon. Part of Bank Negara’s efforts towards turning Malaysia into a more cashless society is the introduction of the Interoperable Credit Transfer Framework (ICTF), which includes the creation of a “common QR” code.

At the moment, merchants who want to include many e-wallet players into their payment system require the use of multiple QR codes. A common QR code – a system that has already been introduced in Singapore – would mean that the merchant only needs one to accept payments from any e-wallet provider.

It’s an ultimately more convenient method for both e-wallet users and merchants. TNG Digital CEO Syahrunizam Samsudin agrees.

“I think the central bank is on the right track to build a common QR,” he tells Digital News Asia, adding that Touch ‘n Go e-wallet will be part of it. However, there needs to be additional thought put into its execution.

“We do need to understand how the consumer experience is going to be like. I think we will need to enter into more discussions with them [the Central Bank] to really understand how the consumer experience is going to be, because – in other parts of the world where e-wallets are prevalent, like China – there isn’t a common QR,” he says.

Syahrunizam additionally notes that people currently decide on which e-wallet to use based on the discounts, vouchers and promotions offered by each player, which he considers unsustainable.

“Over time, they will need to make decisions based on what is more convenient to them, what is more effective for them. I think that’s the common QR agenda, to provide that common info platform to be better educated on e-wallets,” he says.

When asked if Touch ‘n Go will be approaching smaller merchants to on board them into e-wallets, like how China has wet market merchants accepting e-wallet payments, Syahrunizam says: “The simple answer is ‘yes’. But China and Malaysia also have a different demography in terms of how people will support this.

“In Malaysia, wet markets and other areas are still very much cash-driven. And I think the mentality needs to change between consumers and merchants first. I think that it’s going to take a bit of time, because cashless societies need to work both ways. We [TNG] are basically going through all levels of merchants, but we will have to first go through that education process.”

As for how Touch ‘n Go intends to stand out from its competitors going forward, Syahrunizam says that we will soon see newer features. “I think our core strength in transport will get better than what it is today. To the consumer this is just the tip of the iceberg,” he says.

“We are going to use more data to learn about consumer behaviour to enhance the capability of our e-wallet. Stay tuned, there will be a lot more innovation coming from us.”


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