In partnership with UNCDF under the i3 Program funded by MetLife Foundation, GHL launched a series of new financial services for their MSME merchants under ‘GROW’, a marketplace for merchants to get micro-loans, insurance and wealth management solutions. One of GHL’s partners for ‘GROW’ is insuretech start-up Senang, another UNCDF partner. Through this suite of services, GHL hopes to be able to retain and maintain their merchant base while simultaneously offering added value services that could improve the financial health of merchants.
In an interview with Group CEO of GHL Danny Leong, he shares some insights on the state of the market in Malaysia and how the solutions currently under development fit the needs of merchants and their clients in the context of the pandemic.
Danny Leong is a man with experience, ranging from the telco industry to automative software, retail point-of-sale solutions, and finally payment services with GHL. He considers his 10-year experience with GHL to be relatively new, in his own words, and he finds it a good thing. “Sometimes if you’re too old in the industry,” he says candidly in our interview, “you bring a lot of baggage into it with the old thinking. With new people in this space, you have broader and better ideas, which I think helps with the growth of the industry.”
GHL began life in 1994 as a payment IT company, providing payment-related IT hardware and software to the industry like credit card machines and payment networks. At the end of 2010, the company transformed into a “payment acquirer” – when previously the focus was on selling payment-related IT solutions to banks and merchants.
Through their research, GHL found a gap in terms of small merchants not being able to accept cashless payments – banks often do not find it economical and profitable to serve small merchants due to differences in cost structure, and it is a gap that GHL was all too pleased to fill.
Today, GHL is known as an enabler of merchants – big and small – to accept cashless payments. Today their presence is strong in Malaysia, Thailand and the Philippines, with new operations starting up in Indonesia and Cambodia.
The e-payments landscape in Malaysia
Most Malaysians are familiar with credit cards, largely the only other payment option other than cash available in the country until 15 years ago, when the Central Bank of Malaysia began pushing for the use of debit cards.
After debit cards, the next form of cashless payment to come into play in Malaysia was e-wallets, inspired by Alipay and WeChat Pay in China. Malaysia currently has a variety of e-wallets, with staples like GrabPay, Touch ‘n Go eWallet, BigPay, and Boost.
According to GHL, while growth for credit card usage is indeed possible, the numbers in Malaysia indicate that e-wallet and debit growth is significantly higher than credit cards. In general, e-Money transaction value doubled between 2014 and 2018, indicating a Malaysian population that is increasingly comfortable with adopting technology in financial services. The rise in e-wallet and debit growth may be attributed to the need for credit worthiness that comes with applying for a credit card, which may prove to be a challenge for those who have difficulty accessing traditional banking services, as well as a fairly saturated market for credit cards. Furthermore, with the COVID-19 pandemic, there has been a jump in contactless pay transactions where contactless debit card and e-wallets both have seen a rise in transactions.
Against this backdrop, we ask Danny what he thinks of the future of e-payments in Malaysia. While e-wallets, debit cards and credit cards would still be major sources of funds, Danny believes the future evolution would come in its physical form – how such payments would be made. It is not a stretch to imagine a world where one would no longer need to bring their wallet, instead simply making payments through their wearables.
Mobile phones are the way to go, if you ask Danny. He jokes that most people wouldn’t bother to go back if they left their wallet at home, but 90% of people definitely would if they left their phone.
What does this mean for the old, less educated and the low- to moderate-income population, then?
Danny admits that for merchants and users alike, it is a challenge. It all boils down to awareness; for smaller merchants to be aware of cashless payments and how they can utilize them for their business, and for consumers to get into the habit of using such payments in their everyday lives. The effort therefore lies in changing consumer behaviour, which can come in a variety of ways: campaigns to encourage adoption rates, promotions and incentives to push consumption, and taking advantage of the global trend in digital finance.
This is a long journey, but it’s a journey that I think needs to be travelled and we are very happy to be on it.
As ASEAN’s leading payment solutions provider, GHL’s reach spans across 7 countries; Malaysia, Philippines, Thailand, Indonesia, Cambodia, Singapore and Australia – stretching over a vast footprint of 380,800 payment touchpoints across the region. GHL prides itself as a one stop provider for both offline and online e-payment solutions, with over 26 years of expertise. GHL is the leading payment acquirer in ASEAN for over 100 global and regional payment schemes and channels, processing over RM1.5 billion payment transactions per month. Apart from being Malaysia’s largest prepaid credit top up and bill collection network, GHL advocates to catalyse sustainable livelihood of the Micro Small Medium Entrepreneurs (MSMEs) through financial and non-financial value-added services. Winner of prestigious Asia’s Corporate Excellence and Sustainability Award 2019 as Asia’s Best Performing Company as well as The Edge’s Billion Ringgit Club Award, GHL is a listed company with a market capitalization of over RM2.043 Billion @ 13th December 2020. GHL has been listed on Bursa Malaysia since 2003. (www.ghl.com)
For more on the UNCDF Financial Innovation Lab visit https://www.uncdf.org/finlab or email firstname.lastname@example.org
For more on the i3 Program visit http://www.i3program.org