A helpful guide to ALL you need to know about e-Wallets.

2019 / 09 / 12

The Malaysian guide

What is e-Wallet?

So to begin, what are e-Wallets? The “e” here is termed for Electronic, in this case, e-Wallets would mean Electronic Wallets. It allows an individual to transfer money and make transactions over an electronic network, which we know as the Internet. 

It essentially replicates a physical wallet. The functions of e-Wallet are equal to or if not very similar to a physical wallet but with added benefits which we will be discussing below.

Why should we consider e-Wallet?

In this section, we will be discussing the benefits of e-Wallets and how it is a better option than other payment methods.

  • You’re carrying less items with you, ditch your cards and cash at home, just go out and spend just with your phone. Some e-Wallets even have features to store your credit/debit and loyalty cards.
  • If you’re wondering why are coins still a thing, now you don’t have to be digging your wallet for some leftover change. 
  • You don’t have to withdraw from the ATM. Let me just say, withdrawing money from an ATM is firstly troublesome and it raises security issues. You certainly do not want to be robbed after you exit the bank.
  • When a thief steals your phone, you can rest assured that he won’t be stealing your e-Wallet money as every e-Wallet will require some sort of PIN/faceID/password/fingerprint to process a payment. 
  • Lost your phone? Well, you can simply just login into your e-Wallet account from another phone. 
  • Most e-Wallets have regular coupon giveaways or cashback to reward their users.
  • If you like to track your expenses, e-Wallet payments have a detailed overview of what you have spent, when and where. You no longer need a separate budget app to track your cash expenses anymore. 
  • e-Wallets like WeChatPay and AliPay have features that allow you to make purchases overseas with reasonable exchange rates.

The not so fancy side

  • Your smartphone and power bank eventually runs out of battery, but your cash or cards certainly don’t need any charging. 
  • In areas where internet coverage is bad, e-Wallet will not be effective. For example, let’s say you’re on a flight, on a highland or when you’re 3000 feet below the ground. 
  • Although e-Wallet has a wide coverage in city centers like the Klang Valley, shops in suburban areas may still be lacking behind today’s technology. This means you still have to pay with old-fashioned methods. 
  • Well, tech is still tech. Although e-Wallets as of now are very very safely encrypted with tough locks to steer away hackers, only time will tell when the great wall will come crashing down. 

Types of e-Wallets

  1. Typical e-Wallets 

Often these eWallets allow you to store digital cash in it and convert them into purchases at any merchant/store that accept eWallets. Most of these eWallets 

  • Boost
  • GrabPay
  • Touch ‘n Go eWallet
  • WeChatPay
  • AliPay 
  • RazerPay

2. Pass through e-Wallets
These types of eWallets do not store cash, instead, they store your card details which allow you to make purchases at stores that accept eWallets. The benefit to these eWallets is that you no longer have to carry your physical credit/debit and loyalty membership cards. These eWallets also have their respective takes on their rewards system. Specifically for SamsungPay, you can use literally anywhere you go, even if the store/merchant does not have the latest payment system. Your phone acts as a virtual card which can be swiped at the cashier. 

  • ApplePay
  • SamsungPay
  • FavePay

3. Loyalty e-Wallets
These eWallets are quite similar to the typical ones in one exception. They store your digital cash but you can only use it at the respective brand locations. For example, if you top-up digital cash into your Starbucks App, you may only use your balance to purchase anything at a Starbucks store. So if it’s so restrictive, why would people even use it? Well for example at Petronas, you can’t pay for petrol using other eWallets because there isn’t that option. On the other hand, these eWallets tend to promote better offers and exclusive deals for users that use the brand’s respective app. For example, you can collect more points and gain access to limited edition Starbucks merchandise if you use the Starbucks App, as opposed to be paying with typical eWallets. 

  • Starbucks App
  • Aeon Wallet
  • Setel (Petronas stations) 

How is it being used?

Merchant scanning customer’s QR code

You go to a shop that accepts e-Wallets, pick up the items you want and head to the cashier. The cashier lets you know the amount to pay. You take out your phone and scan for the shop’s QR code. Key in the amount that you have to pay and voila, you’re done.  

If this wasn’t already easy, some shops simplify the steps by eliminating the process of scanning and keying in the amount. So if you don’t scan anything and key in an amount, how is it possible to pay? Well, simple, these shops scans your account’s QR code and the shop automatically charges you the amount. So to recap, you take out your phone, let them scan you, and voila, you’re done. 

The Future is bright

As of now, you can’t transfer money between different e-Wallets neither can you withdraw the money. There is a great possibility in the future for these barriers to be broken down. Let’s just say a shop only supports Boost and you didn’t install that particular e-Wallet. But since money can flow freely between any e-Wallet, you can still make the payment using another e-Wallet like GrabPay. These will benefit users as the e-Wallet coverage will be wider. 

Currently, there is a maximum balance and transaction limit to all the e-wallets, with GrabPay and TnG having one of the highest balance limits of RM5,000. Imagine if you would like to purchase several items that total to more than RM5,000, you certainly would not be able to do so with e-Wallet. This limit may be stretched higher in the future, allowing us to make bigger purchases too. And because of these, luxury retail companies will also start to move along with e-Wallet. 

People in China can already do so much with Alipay and Wechat, they can book train, flight tickets straight from their e-Wallet app. Pay and manage their utilities, insurance, loans, healthcare, maintenance services and you name it. We can see this coming to Malaysia in the very near future. 

We think that for a shop to accept e-Wallet, they most likely need to be a proper shop, ruling out hawkers and street-side stalls. This is 100% not true, in China, all the hawkers and street vendors each have their own unique code so that customers can scan and pay them. So when our hawker aunties and uncles start to realize the benefits of e-Wallets for them (which we will discuss in another part), we will be able to use it in hawker and pasar malam places.