Malaysia has made significant strides over the past decade to set the stage to become a truly digital economy. The recently announced MyDigital initiative provides a roadmap to take the country on an accelerated digitization drive.
Studies have shown that over 70 percent of Malaysians are in support of the transition towards becoming a cashless society. With the rise of e-commerce and digital payment options in Malaysia, this comes as no surprise.
The COVID-19 pandemic has also accelerated Government efforts to push for faster adoption of the digital economy which in return also relies on factors such as the rise of the cashless society beyond urban centers.
“We have seen the rate of digital adoption from both consumers and small business increase rapidly over the past 18 months, driven by the lockdowns. We remain optimistic that these changes are not temporary but representing a lasting shift in the behavioral patterns of our customers. says Sheyantha Abeykoon, Chief Executive Officer of Boost.
To underline the increasing acceptance of digital payments, the homegrown financial services company’s e-wallet business experienced very strong growth last year as its user base increased tremendously by close to 75 percent between the Jan-Dec period versus the 45 percent growth from the same period in 2019. Similarly, its merchant base grew by over 65 percent in 2020.
Becoming A Digital Nation
Successfully building a digital nation firstly requires a conducive ecosystem that promotes and acts as a catalyst to innovation.
With these crucial building blocks in place, Sheyantha said that tech, digital and fintech companies like Boost have an important role in participating and developing products as well as services on top of it that benefit businesses and consumers.
Boost, which has been leading the charge in this digital space over the past four years, recently announced its rebranding exercise. The re-launched Boost brand now unifies all of Axiata Digital’s fintech services that span payment services, artificial intelligence (AI) -based alternative lending, digital insurance, cross border content services and merchant solutions.
Since its inception in 2017, the homegrown company has been a pivotal player and enabler in driving digital transformation in the country. It started as a digital payments provider with the country’s first major e-wallet and is rapidly evolving into a broader digital financial services provider today with micro merchants and SMEs (MSMEs) being a key focus segment.
This track record caught Putrajaya’s attention and last year Boost was selected by the Government as a partner for three national initiatives – ePENJANA, Shop Malaysia Online and MSME E-Commerce Campaign – under the PENJANA Economic Recovery Plan.
“Consumer incentive offered through ePENJANA and Shop Malaysia Online contributed to a significant growth in digital payments usage with Boost. The e-wallet’s total Gross Transaction Value (GTV) in 2020 more than doubled compared to 2019 with the two Government initiatives playing a significant role in achieving this milestone.
Meanwhile, through the MSME E-Commerce Campaign, Boost helped over 15,000 cash-based micro and small merchants easily shift their businesses online. One key inclusion in that campaign was the Boost Business Payment Link, a then newly developed contactless payments facility that allowed merchants to collect payment for online orders. It was developed at the start of the pandemic in response to struggles faced by MSMEs not allowed to physically open their businesses and facing almost certain collapse.
“We observed that our merchants who leveraged on the Boost Business Payment Link saw at least a 60 percent increase in transaction value per transaction compared to offline payments through physical QR codes,” commented Sheyantha, pointing out that this demonstrated the enormous potential for MSMEs to grow and expand in a digital world.
“The PENJANA initiatives were timely to support the dual objective of granting relief, on top of encouraging digital payment adoption as a means to mitigate the harsh impact of the pandemic. Following up on that success, this year, we were again selected and currently participating in the Government’s ongoing Go-eCommerce and Shop Malaysia Online campaigns where we hope to further facilitate increased affordability and accessibility to digital services with low barriers to entry amongst users and merchants across all digital maturity levels,” he said.
In further driving the cashless agenda, a couple of months ago, the Government also introduced the eBelia initiative targeting youth adoption of digital payments. Boost was once more chosen as an official e-wallet for the disbursement of eBelia credits expected to benefit some two million eligible Malaysians.
A 2030 Malaysia
COVID-19 has accelerated the need for faster digital adoption especially amongst MSMEs in sectors that remain underpenetrated.
Today, Boost serves over 350,000 merchants, with at least half comprising of purely cash-based micro and small merchants who have no credit history to qualify for financing from traditional financial institutions.
“Leveraging data, AI and end-to-end digital platforms, we are able to use transaction data from our Boost merchants to build them a credit history,” Sheyantha explained.
Between August last year and June this year, Boost Credit (formerly known as Aspirasi) has experienced 12 times growth in loan applications and up to 22 times higher disbursements compared to the preceding period.
Boost also applied in conjunction with RHB for a Digital Banking license and if successful hopes to extend banking services to its base of consumers and merchants This provides Boost with a platform to build a full range of services for the MSMEs and consumers it services from payment, merchant solutions, cross border services, financing and protection products and banking services.
“Malaysia has nearly one million MSMEs. Todate, we have assisted about 175,000 merchants transform digitally. We see plenty of opportunity to further enhance our offerings to this segment that will allow them to operate on a digital-first basis with the services that we are building today,” Sheyantha said.
The Boost CEO is optimistic that by 2030, there will be an inclusive Malaysian digital economy where everyone will have equal and fair access to a formal financial system and more powerful tools at their disposal.
“We are driving change and spearheading the industry forward so that the financial system will be more of a digital enabler it should be than it is today. We’re confident that what we’re building today will be a key asset to uplift people out of the B40 segment, promote wealth generation and unleash the full potential of the MSME base in this country,” Sheyantha concluded.
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