DIGITAL wallet or e-wallet is perhaps the most trending payment system that has captured the hearts and minds of Malaysians these days, especially when we're all locked in our homes during the Movement Control Order since March 18. Through digital wallets, it has become a norm to see people making purchases of needful things while at home.
As we move towards a cashless society, we are witnessing the mushrooming of digital wallet payment platforms in the country. Digital or e-wallets resemble payment cards that work out of an application on their smartphones where one can load funds into a virtual wallet, and then use those funds to pay for goods and services.
Around the world, especially in China, payments' landscape is transforming dramatically with scores of cashless innovations on the rise.
In a BBC documentary not long ago, I was surprised to watch old men and women, in their 60s and 70s, in China making purchases through Alipay and WeChatpay. I can't imagine our elation if were to see our grandmothers and grandfathers scanning QR codes to buy groceries on their smartphones. That time will come soon, I guess.
As technology advances using algorithms based on artificial intelligence and machine learning, it's clear that digital payments are creating ripple effects around the world and yet it's still far to go, especially in Malaysia.
But consumer behaviour is changing. Meanwhile, as the magnitude of Covid-19 grows, these trends have only accelerated.
According to research conducted by McKinsey, an American management consulting company, global payments through the digital payment systems surpassed US$1.9 trillion in 2018 alone, with transactions in Asia Pacific exceeding US$900 billion and North America, US$500 billion.
Although it's a newbie in the country's financial system, e-wallet has begun to attract more youngsters to carry out such transactions.
Malaysians by the hundreds of thousands have started using it since the Covid-19 outbreak. For those with an income of less than RM100,000 annually, they can get RM50 through e-wallets if they download the MySejahtera application.
Even when the previous government introduced e-wallets to encourage a cashless society, e-wallets service providers were "at war" with each other, trying to win the hearts and minds of 32 million citizens of this country.
It was reported that in 2017 alone, Boost and Touch 'n Go had a few million subscribers between them, while GrabPay claimed that it was used by two out of three Malaysians.
It seems that the traction is gaining every other day, especially among Gen Z and millennials, who make up some 45 per cent of the total population.
The Gen Z with ages ranging from 5 to 21, and the millennials, referred to as Gen Y, aged between 22 and 38, are the active users of digital wallets.
I've read an article that makes a keen but quirky observation that the Gen Z and Gen Y basically eat, sleep and drink mobile phones.
With the high Internet penetration of more than 80 per cent in Malaysia, more Malaysians are poised to use digital wallets in the near future, coupled with a robust e-commerce market value of more than RM17.14 billion, as reported by investment and financial services company J.P. Morgan last year.
I truly believe businesses looking to expand in Malaysia need to offer digital wallet payment options, as these cover a much greater proportion of the population than credit cards.
As the government encourages a cashless society, I also believe e-money issuers are pushing for e-wallet adoption with attractive promotions that will drive traffic to the mushrooming virtual stores that's just a swipe away.
Given the McKinsey research and J.P. Morgan report, I'm sure that e-wallet adoption and payments in Malaysia, too, will increase in the near future.
C'est la vie.
The writer, a former NST journalist, is now a film scriptwriter whose penchant is finding new food haunts in the country
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times