Malaysia's Touch 'n Go sees payoff from Ant Group joint venture with e-wallet service in world's largest e-payments market

A Malaysian smart card company, a tiny player in the global online payments business, is hoping to learn from established giants Alipay and WeChatPay as it expands its e-wallet service into China, the world's largest e-payment market.

Touch 'n Go Group, majority owned by CIMB, announced its cross-border payment expansion into China last November through a partnership with Alipay+, the global cross-border digital payments solution offered by Chinese fintech giant Ant Group.

"It's just as if you're using Alipay ... you don't need to worry about foreign exchange. Everything is converted behind the scenes," Alan Ni, the chief executive of TNG Digital, a subsidiary of Touch 'n Go, said in an interview with the South China Morning Post.

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"If you're a tourist in China, only using cash [without an e-wallet] is not easy to survive. It is quite difficult, because sometimes people just say no change for you," Ni said.

Touch 'n Go's TNG Digital joint venture with Alipay, which it formed in 2017, is now paying off in a market that surpassed 911 million online payment users in December 2022, according to the latest report from the China Internet Network Information Centre.

The mainland China e-payments market is dominated by two companies - Alipay with 55 per cent share and Tencent Holdings' WeChat Pay, with 28 per cent share, according to the Post's 2021 China Internet Report.

Tencent, China's social media and gaming giant, has begun to facilitate payments by Visa and other international bank cards through WeChat Pay, following a similar move by Alipay. Ant is an affiliate of Alibaba Group Holding, owner of the Post.

The move will allow travellers to use their smartphones to pay tens of millions of merchants across China, from shops and hotels to transport providers, provided they already accept the domestic version of WeChat Pay.

The first Touch 'n Go card was introduced in 1997 and has since become a mode of payment on trains and buses, expanding the cashless experience for Malaysians. In 2017, it entered the fintech market via the TNG Digital joint venture with Ant.

"If you have a very big user base, potentially you can do something even more with this user base," Ni said.

An Alipay sign outside an Ant Group office in Shanghai, China, June 10, 2022. Photo: Bloomberg alt=An Alipay sign outside an Ant Group office in Shanghai, China, June 10, 2022. Photo: Bloomberg>

The company is facing tough competition in Malaysia, from the likes of fintech giant Wise to Southeast Asian ride hailing group Grab, which rolled out GrabPay as a digital payment service for third-party merchants. Regional e-commerce giant Sea has also made a move into Malaysia with its e-wallet.

Ni told the Post that he is trying to learn from the mature business models of Chinese companies like Meituan and Dianping, which serve people seeking information on where to eat and play. "All the business models in China are already very stable," Ni said. "Southeast Asia is still at an infant stage. That actually leaves us a lot of room to grow."

Besides fighting the competition, Ni said a major challenge is how to change people's perceptions when it comes to online payments.

"We have some [colleagues] from China [who] basically give us the advice that we need to make the user experience seamless," explained Ni. "But Malaysian colleagues have different opinions. They say people may not feel very secure and comfortable, because [they] have never used this [service] before."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.