Touch 'n Go Partners with Alipay+ to tap China's E-payment Market.
Touch 'n Go Group partners with Alipay+ to enter China's massive e-payment market, leveraging the success of giants Alipay and WeChatPay.
In a bid to tap into China's booming e-payment market, Malaysian smart card company Touch 'n Go Group is embarking on an expansion plan, drawing inspiration from established players such as Alipay and WeChatPay. With China boasting the world's largest e-payment market, Touch 'n Go aims to learn from the strategies of these giants as it introduces its e-wallet service.
Last November, Touch 'n Go, primarily owned by CIMB, announced its foray into China's cross-border payment space through a strategic partnership with Alipay+. This collaboration allows Touch 'n Go to leverage Alipay+'s robust global cross-border digital payments solution, offered by Ant Group, a leading Chinese fintech giant.
Alan Ni, CEO of TNG Digital, a Touch 'n Go subsidiary, emphasized the seamlessness of the service in an interview with the South China Morning Post, stating, "It's just as if you're using Alipay... you don't need to worry about foreign exchange. Everything is converted behind the scenes." Ni further highlighted the challenges faced by tourists who solely rely on cash, stating that survival can be difficult as some establishments refuse to provide change.
Touch 'n Go's joint venture with Alipay, established in 2017, is proving successful in China's rapidly growing e-payment market. The latest report from the China Internet Network Information Centre reveals that the country surpassed 911 million online payment users in December 2022.
According to the 2021 China Internet Report by the South China Morning Post, Alipay dominates the mainland China e-payments market with a 55% market share, while Tencent Holdings' WeChat Pay holds a 28% share. Tencent, known for its social media and gaming platforms, has also followed Alipay's lead in facilitating payments through international bank cards via WeChat Pay. Ant Group, which owns Alipay, is an affiliate of Alibaba Group Holding, the parent company of the South China Morning Post.
With Touch 'n Go's expansion, travelers will be able to use their smartphones to make payments at millions of merchants across China, including shops, hotels, and transportation providers, provided they already accept the domestic version of WeChat Pay. Touch 'n Go, initially introduced in 1997 as a smart card for trains and buses, has become a prevalent cashless payment method in Malaysia. The company entered the fintech market in 2017 through its joint venture with Ant, forming TNG Digital.
While facing stiff competition from established players in Malaysia, such as fintech giant Wise, Southeast Asian ride-hailing group Grab, and regional e-commerce giant Sea, Touch 'n Go remains optimistic about its growth potential. Alan Ni explained the company's strategy, stating, "If you have a very big user base, potentially you can do something even more with this user base." He emphasized the advantage of Southeast Asia's relatively nascent stage compared to China's mature business models, providing ample room for growth.
Apart from competition, Touch 'n Go also faces the challenge of changing people's perceptions regarding online payments. Alan Ni revealed that colleagues from China advised the company to focus on providing a seamless user experience. However, Malaysian colleagues expressed concerns about security and comfort due to the unfamiliarity of the service.
Malaysian smart card company Touch 'n Go expands its e-wallet service into China, targeting the world's largest e-payment market.
Through a partnership with Alipay+, Touch 'n Go aims to learn from established players Alipay and WeChatPay.
The joint venture with Alipay has proven successful in China, capitalizing on the country's massive online payment user base.