ISSUE OF THE BULLETIN

W H A T Y O U N E E D T O K N O W A B O U T E - W A L L E T S IN MALAYSIA

Back in the day, paying for something at the supermarket checkout line or at your local merchant was purely a cash transaction. You gave money equal to the value of the goods you paid for and then got some change back. The problem was that you needed to carry a wad of cash and coins to conduct transactions. Then along came credit and debit cards which offered some amount of convenience as you didn’t have to carry a reserve of cash wherever you go but you still need to carry a wallet around.

Now, if you walk to any checkout till, you’re greeted by a host of colourful signs offering a veritable array of new digital payment providers all of which allow consumers new options to pay for goods and services. Some offer discounts if you shop or eat at certain restaurants or buy from certain merchants. Others give you cashback rewards with continued use. All of them make it easier and more tempting than ever to indulge in retail therapy with just your smartphone without the need for your wallet or for the matter, a credit or debit card. Welcome to the eWallet revolution.

What exactly are eWallets?

For the uninitiated, eWallets are a short form for the term electronic wallet. The terms mobile wallets or digital wallets also refer to the same thing. An eWallet is essentially a service provider that operates via an app on your smartphone to help track your payment instruments while offering other incentives like reward points, discounts, cashback benefits or other perks to continue using it.

In Malaysia, the eWallet industry is still considered in its infancy but it’s growing by leaps and bounds with dozens of eWallet providers in Malaysia at present vying for market share. Some eWallets help you manage your existing payment instruments like credit cards and debit cards but do not store monetary value.

An example of this is Samsung Pay that allows you to use your credit and debit cards via your smartphone without having to carry the physical card itself but which does not issue any payment instrument of its own. Alternatively, you have an example like the Touch ‘n Go eWallet that you can store a sum of value in Ringgit that you can then use for purchases and for paying your fare at highway toll gates and LRTs. The latter example would be an eWallet that stores and allows for transactions in the form of e-money.

The key difference here is that while there are many eWallets available, not all eWallets are able to store or use e-money as it is a licensed payment instrument that is under the purview of Bank Negara Malaysia. In the case of eWallets that don’t integrate e-money mechanisms, they usually piggyback on top of a bank’s existing payment systems.

According to Bank Negara Malaysia, e-money is defined as -

ELECTRONIC MONEY (E-MONEY) IS A PAYMENT INSTRUMENT THAT CONTAINS MONETARY VALUE THAT IS PAID IN ADVANCE BY THE USER TO THE E-MONEY ISSUER. THE USER OF E-MONEY CAN MAKE PAYMENTS FOR PURCHASES OF GOODS AND SERVICES TO MERCHANTS WHO ACCEPT THE E-MONEY AS PAYMENT.

Including the aforementioned Touch ‘n Go there are, at present, a total of 46 e-money issuers available in Malaysia in 2019 with the total list available at Bank Negara Malaysia’s website at https://www.bnm.gov.my/index.

php?ch=ps&pg=ps_regulatees

PAY

Why use an eWallet?

An eWallet offers quite a few benefits. Using an eWallet to pay for goods and services makes things considerably more convenient, especially in situations where you’re in a hurry like paying for parking fees when exiting a car park or paying for groceries at the checkout till so that you needn’t have to fish for change. Depending on which eWallet you sign up for, users can also get rewards or discounts for selected services too especially if you frequent an establishment such as a favourite restaurant so that you can get extra discounts or other perks.

Adopting an eWallet also makes for a much slimmer physical wallet too as well as the benefit of having a chance to recover the stored value in your eWallet if you happen to lose your phone. Granted, a negligent user can end up losing or getting scammed of the contents of their eWallet too but that’s still better than carrying physical currency around which, if lost, will be unrecoverable. This level of convenience is liberating indeed and makes paying for stuff a breeze.

Downsides of eWallets

Unfortunately, there are a few downsides when using eWallets. The biggest being that the sheer number of eWallets currently available in the market means that you will likely have to use a combination of them to get your shopping or other business transactions done as there is no one dominant eWallet at present in Malaysia that can cater to all your favourite shopping venues and interests nor will any one merchant necessarily accept any or all of the eWallets you are using.

Another limitation to the plethora of eWallets out there is that they may not necessarily be able to transfer value across to each other for personal transactions. If you’re using one type of eWallet and your associate that you want to pay is using another eWallet, you likely won’t be able to transfer money in any form to each other. This also works the other way around. You may have to top up the value in an eWallet manually or via a credit card but have limited means to cash out whatever value that you’ve put into an eWallet.

Having all those extra eWallet apps also takes up valuable storage space on your phone. This also has the added downside of having to store multiple different passwords and eWallet apps too and keeping track of them all will be a chore in and of itself. Even worse, if you forget to bring your phone out or lose it, you temporarily lose access to all your eWallets which can make for a rather embarrassing outing if you didn’t bring enough cash in your wallet and neglected to bring along your credit cards too.

Future of eWallets in Malaysia

That aside, the future is bright for eWallets in Malaysia but what will make it exciting is that Bank Negara Malaysia has introduced the Interoperable Credit Transfer Framework (ICTF) that aims to address the disparate number of eWallets out there and allow for a shared payment network with interoperable QR codes that will enable payments outside of a given eWallets ecosystem to other users and merchants. This effectively means that eWallet A can transfer funds to eWallet B via a compatible QR code and to other merchants too. With the high smartphone penetration rate in Malaysia, the prevalence and eventual standardisation of payment systems means that eWallets will be here to stay and it’s simply a matter of time before they become a way of life.

T H E R I S E O F T A R G E T E D A D V E R T I S I N G - BOON OR BANE?

If you are a prolific user of social media whether it is Facebook, Instagram or whatnot, partake in online shopping and use a web browser in some form or fashion, you’ll likely have encountered somewhat creepy moments when the very thing that you’ve been searching for online via a few surreptitious queries suddenly appears in your feed as some form of advertising, be it as a pop-up ad or appearing in the corner of your social media feed as a sponsored post. Welcome to targeted advertising.

Back in the days of print and before the proliferation of widespread broadband and the Internet, advertising was primarily via print or via outdoor billboards, radio and television commercials. Much like carpet bombing, it was very imprecise and advertisers didn’t quite know if any of their ads reached their intended target audience. There was some measure of control by conducting surveys and discovering what demographics tended to favour certain platforms such as kids watching TV on Saturday mornings when there’s no school session or plonking in toy ads in the middle of a cartoon but by and large, the traditional approaches to advertising were not particularly precise affairs.

The rise of the Internet and affordable connectivity means that more people than ever before are connected online and with it comes a wealth of information. Every website you surf online, everything you search for information no matter how simple and in some cases, everything you type even if it’s an ostensibly private chat on social media leaves a trail of digital breadcrumbs. These digital breadcrumbs help advertisers target their advertisements to the most appropriate people which is why if you searched for bedding and suddenly start seeing offers for mattresses on your social media feed, it’s not sorcery but targeted advertising. A host of firms including some of the largest search engines in the world collect all manner of information. These organisations then collect that data and uses artificial intelligence algorithms to process and predict our behaviour based on prior actions online and which are then used to display advertising that would have the most impact. This kind of analytics are also used to recommend videos on video streaming sites for us to watch based on prior content and genres that you’ve enjoyed.

For an advertiser, this is of significant benefit as it offers a higher return on investment on account of less wastage of advertising dollars and helps them target customers that will most likely watch said advertising and be interested in what they have to offer. On the other side of the fence, customers get a more personalised experience though at the expense of wasted bandwidth as all those ads shoved onto your smartphone or notebook display eat up precious data. Unfortunately, targeted advertising when you’re online isn’t going to go away anytime soon.

There are however ways to keep yourself private. Here’s a few methods how and while they each go some way to dealing with targeted advertising, they all work best when used in conjunction with each other.

Find the Opt Out Option in Search Engines and Social Media

Search engines and social media come with options that enable you to opt out of advertising and search engines in particular also have settings that also tell websites you go to ‘not to track’ you. These controls are usually in the settings of each browser and once you’ve enabled these options, you’ll get much less personalised ads served to you based on your online behaviour.

Add an ad blocker to your browser

Some browsers like Chrome allow for extensions, extra features that you can download and add to your browser to enable additional functionality. In the case of Chrome, you can find ad blockers that can help block ads getting shoved to your phone or notebook. You’re also able to dial how aggressive you want the ad blocker to work.

Use a VPN

Many online advertisements are targeted based on your geographical location and surfing behaviour. Using a Virtual Private Network or VPN for your web browsing shunts your traffic through another server in another country so that advertisers won’t know where or who you are to begin with. Most aren’t free but a few free VPNs exist though they have limited locations that you can select their VPN services from with most being in western countries.

Use Incognito Mode on your Browser

Almost every web browser worth the name has a selectable Incognito mode that opens up a browsing window with a special icon and several unique features that keep you relatively anonymous online. Surfing in Incognito mode means that your web browser will ignore most tracking cookies that attempt to understand your behaviour and after you’re done and close the window, the browser will not record whatever or wherever you surfed. Some of these cookies are necessary though, such as when you’re adding goods to a shopping cart when shopping online. Incognito mode is not completely anonymous though - your internet service provider can still track the IP addresses you visit and Incognito mode does not mean you’re completely off the radar to advertisers - you’ll still get the occasional ad; just not targeted directly at you - but it does go some way to dealing with the more casual annoyances when surfing online.