Here at Oppotus we have kept our fingers solidly on the pulse of the e-wallet landscape in Malaysia, tracking the usage and growth of e-wallets through rises and falls over the past 4 years ever since they were first introduced.
As more and more Malaysians have chosen to go cashless and e-wallets have become more and more integrated with local vendors and services, we find that the usage of e-wallets has hit its peak in 2023 and continues to show great potential going forward.
As we look back at the year 2023, we see that the usage of e-wallets has once again been on the rise, nearly reaching the peak of 64% overall usage recorded in 2021, when usage was at an all-time high following the end of the COVID-19 pandemic.
Looking at the average number of e-wallets used, we see that by the end of 2023, the number of e-wallets used by each individual in the last three months has dropped to 1.9, which is the lowest it has been since the start of 2020. This marks a noticeable shift from the trend observed in recent years, where individuals typically utilised an average of 2-5 e-wallets at a time. With the e-wallet landscape maturing and people getting accustomed to using them daily, it is evident that people are now streamlining their e-wallet brand usage for their convenience, choosing to stick with the e-wallet that best suits their needs.
This also ties in with the leaps in functionality that local e-wallets have made as they now have much wider applications compared to a few years ago, making it a lot easier for individuals to rely on a single e-wallet for most of their payment needs. Touch ‘n Go eWallet for example has been integrated with Alipay+, which allows users to make cross-border payments in countries such as China, Japan, Singapore, South Korea, Thailand, and Indonesia, with even more countries planned to be included.
When it comes to the average monthly e-wallet spend, Malaysians have maintained a relatively stable spending pattern over the past 3 years. On average, Malaysians haven’t been spending more than RM300 a month using e-wallets, but 2023 saw an overall reduction in the average monthly e-wallet spend to RM245.28, which is the lowest it has been in the past 3 years. Furthermore, as of 2023, we see that there are no longer any individuals who spend more than RM1001 a month on average.
This is another metric implying that the adoption of e-wallets has matured among Malaysians, with users settling into their preferred spending routines.
Cash remains the most preferred payment mode among Malaysian consumers at 41%, while debit card comes in second followed closely by e-wallets at 18% and 14% respectively. Credit cards are the least favored payment method for in-person transactions by a considerable margin.
On average, e-wallets are used most often in the F&B sector, followed by convenience stores and groceries, with more than 50% of Malaysians using their e-wallets in all 3 of these sectors.
As we analyse the usage of e-wallets in different sectors throughout 2023, we find that there was below-average e-wallet usage on F&B in the first half of the year at 46-47%, but this jumped to 69-75% in the second half of the year which was above average.
Touch ‘n Go maintains its position as the most utilised e-wallet brand, a trend that has persisted since 2020. Second-tier e-wallets like Boost, Alipay, BigPay, and GrabPay, exhibit similar usage patterns and are considerably behind Touch n’ Go in terms of popularity.
This holds across various sectors, including F&B services, retail, supermarkets, and telecommunications (mobile reloads), which can be seen in the following slides.
The expenditure on F&B services through Touch ‘n Go has remained consistently steady, ranging between 23% and 36% across the four quarters of 2023.
In contrast, the usage of other e-wallets displayed notable instability, with Boost and BigPay experiencing a remarkable fivefold increase from 1Q to 2Q, as the usage of Boost surpassed even Touch ‘n Go for that period.
In the realm of convenience store transactions, Touch ‘n Go emerges as the clear leader among e-wallets. The data points to a consistent preference for Touch ‘n Go, with the other four e-wallets falling notably behind in terms of usage.
It comes as no surprise that Touch ‘n Go also consistently dominated the e-wallet landscape in the groceries and mobile reloads sectors, standing out as the preferred choice among users and even enjoying an above-average boost in usage during 2Q23.
Regarding food delivery services, Touch ‘n Go stands out as the overall go-to e-wallet for users despite the spike in GrabPay usage in 2Q23.
Some may be wondering whether Malaysians will continue to use e-wallets in the future if there are no longer incentives such as cashback, rebates, promotions, and discounts.
Based on our findings, e-wallets are extremely likely to stay as an overwhelming 93% of Malaysians expressed a commitment to sustained e-wallet usage, irrespective of the availability of incentives.
This resolute sentiment suggests a strong and intrinsic adoption of e-wallets, pointing towards a growing cultural shift where users value the convenience and efficiency of electronic payments beyond external rewards.
Although only 41% of non-e-wallet users express an intention to adopt e-wallets in the next six months, it is imperative to understand that this figure of 41% is among the overall 23% of Malaysians who have yet to embrace e-wallets.
This highlights an opportunity for e-wallet brands to target this audience and conduct focused outreach campaigns, as effectively engaging with this group could contribute to increasing overall e-wallet adoption rates across the nation. These non-users will most likely become easier to win over as a higher percentage of the Malaysian population adopts e-wallet usage as part of their daily routine. In addition to this, e-wallets themselves will also become more appealing to potential users as they continue to evolve and offer more functionality that will serve to make life more convenient for it’s users, getting closer to becoming a one-stop solution for things such as bill payments and insurance coverage.
This concludes our 2023 e-wallet studies. If you would like to delve deeper into the growing e-wallet landscape, feel free to contact us at theteam@oppotus.com.
