Cash, Card or... Mobile?

By Ariff Roose

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China’s two largest mobile payment platforms, Alipay and WeChat Pay, have already revolutionised the way China and its people pay for things. And now they’re trying to do the same with the rest of the world. 

Just three years ago in China, almost all of its traders, vendors, taxi cabs relied on cash to pay for things. Today, you’d struggle to pay for food at a wet market and your taxi fare without a mobile phone and a China-based bank account. Their shops are littered with QR codes - hanging from ceilings, pasted on walls, and even stuck on themselves - readily awaiting for you to pay by scanning the code.

Oh the times, they are a’changin. Gone would be the days where the cashier gives you the look when you’re looking to break your 50 ringgit note by buying a Kit Kat bar.

This colossal shift was mainly driven by both companies, who together backed 93% of all $15 trillion spent through mobile payment platforms last year. What’s mind-boggling is that the figure grew tenfold since 2015, and is projected to further increase to $45.5 trillion in 2021. 

Seeing their successes back home, both companies are aggressively trying to expand their global reach. And, with support from the Malaysian government and Bank Negara Malaysia, they might penetrate our  market much sooner than expected. 

AliPay had already reached an agreement with Maybank and CIMB (amongst other major corporations), with the latter giving them access to millions of Touch ‘n’ Go users. Some hawkers in Penang have also started using the e-payment service to serve the growing number of Chinese tourists. 

On the other hand, WeChat Pay is banking on the proactivity of its 20 million WeChat Messengers users in and around Malaysia to adopt its mobile payment platforms.  

But despite the growing positivity about the convenience of not having to visit an ATM ever again, the successes of AliPay and WeChat Pay heavily hinges on overcoming two problems: infrastructure and the skepticism of Malaysian consumers.

The viability of cashless transactions entirely depends on a fast and reliable internet connection, and a significant number of smartphone users - both of which we don’t have. Our existing mobile and digital infrastructure is neither as efficient or extensive as it is in China, and it just wouldn’t be able to sustain the comprehensive e-payment method. The moment we step outside our bustling city centres, we’re inevitably greeted with slower and unreliable mobile internet that nullifies the need for such a thing.

The other major challenge has to do with the Malaysian consumers’ skepticism towards contactless payments. For the number of years that Visa PayWave and the likes has been around, Malaysians haven’t truly embraced its convenience for fears of safety and security. And, those fears may compound even further with mobile payment platforms as they ‘d be able to to track your spending habits, location, income, lifestyle, interests, and to an extent, our greatest wants and needs. 

Having said that, a lot of our information is already out in the world through our use of Facebook, Amazon and even Lazada. Major tech and data companies collect our habitual information to better target advertisements and curate timelines. And for companies like AliPay or WeChat Pay, it shouldn’t be much different.

But these problems could be solved by a handful of enterprising corporations and a willful, visionary governing body - both of which we have. While the adoption of mobile payments might not be as quick as it is in China, it could easily spur our digital infrastructure to develop accordingly, as well as turn our skepticism into confidence in regards to cashless transactions. 

… Just imagine ourselves in the future: giving ang pows and duit raya through QR codes and mobile phones. How weirdly fascinating would that future be?