Latest M&A and Co-operation Developments in Malaysian Payment Platforms: Industry Changes and Future Trends

Introduction: An Overview of the Digital Payments Market in Malaysia

In recent years, with the rapid development of financial technology (FinTech) and strong support from government policies, Malaysia's digital payments market has seen unprecedented growth opportunities. As one of the most dynamic economies in Southeast Asia, Malaysia is experiencing a rapid transition from a cash-based to a cashless society. This article will analyse in-depth the latest M&A activities and strategic partnership dynamics in the Malaysian payment platform sector during 2023-2024, revealing the business logic behind these deals and their impact on the industry landscape.

Part I: Analysis of major merger and acquisition cases

Touch 'n Go's Strategic Integration with GrabPay

One of the most notable deals of early 2023 was the announcement of Touch 'n Go Digital's (TNGD) acquisition of part of GrabPay Malaysia's business. The agreement, valued at approximately US$150 million, marks the deep integration of the two e-wallet platforms:

• Complementary resources: TNGD to gain access to GrabPay's superior resources in small and medium-sized merchant network
• technology sharing: Both parties will achieve interoperability in QR code payment technology
• Expanded user base: The combined entity will reach more than 20 million active users

This merger not only changes the competitive landscape of the market, but also provides consumers with a more seamless cross-platform payment experience.

Boost acquires Razer Fintech's Malaysian operations

Another significant transaction was the completion of the acquisition of Razer Fintech's Malaysian business by Axiata's Boost in the third quarter of 2023:

1. Amount details: All-stock deal valued at about $80 million
2. strategic significance::
   • Enhanced game-related payment scenarios
   • Access to young user groups
   • Expanding cross-border remittance capabilities
3. Regulatory approval processTaking five months reflects the prudent attitude of the National Bank towards industry consolidation

Part II: New trends in strategic cooperation

Maybank deepens partnership with Shopee Pay

Malayan Banking Berhad (Maybank) and Shopee Pay announced the extension and expansion of their co-operation agreement in early 2024:

• Co-branded card issuance exceeds 1 million
• Co-development of BNPL (buy now pay later) solutions
• Offline merchant coverage increased by 35%

This "win-win" model between banks and e-commerce platforms is becoming an industry standard.

BigPay's innovative alliance with international card organisations

AirAsia's BigPay has been making a lot of moves recently:

This type of international cooperation has significantly enhanced the international competitiveness of local platforms.

Part III: Changes in the Regulatory Environment and Implications

With the implementation of the amendments to the Financial Services Act, the National Bank (Bank Negara Malaysia) has strengthened the capital requirements for e-money institutions.

1. Minimum paid-up capital raised to RM50 million
2. Stricter rules for localised data storage
3. Standardisation of the anti-money laundering review process

These changes are directly contributing to a wave of consolidation in the industry - smaller players are seeking to be acquired, while the headliners are expanding their scale advantage through mergers.

Part IV: Future outlook and development projections

Based on current trends, we have made the following forecasts for the industry over the next 24 months.

✔️ Grab may seek to exit the self-service payments business altogether
✔️ TNGD may launch IPO preparations
✔️ QRIS standard (ASEAN Unified QR Code) adoption rate to reach 80%+
✔️ BNPL market size expected to exceed RM5bn

Of particular interest is the opportunity for innovation in the area of Islamic Financial Technology (i-FinTech), where more Sharia-compliant payment solutions are expected.

Part V: The Rise of Islamic Financial Technology (i-FinTech)

Sharia-compliant payment solutions become the new blue ocean

With the Malaysian government's strategy to promote the 'Islamic Digital Economy', Shariah-compliant payment platforms are receiving unprecedented policy support and market attention, with a number of breakthroughs in this area between 2023 and 2024:

1. Bank Islam's strategic partnership with KiplePay

   • Launch of the first e-wallet with no "riba" (interest) at all
   • Integration of Zakat (Zakat) auto-calculation and donation function
   • Has attracted over 500,000 devout Muslim users

2. SadaqaTech platform's innovative model

   • World's first blockchain-based traceable charity payment system
   • The "Pay with Sadaqa" feature allows for the automatic transfer of change to charity
   • Data mapping with the National Islamic Religious Affairs Bureau (JAKIM)

3. Improved regulatory framework
   The Securities Commission (SC) has recently issued Guidelines on Digital Islamic Financial Services (DIFS), which specifies:

   • Sharia compliance review process standardised
   • Ban payment interfaces involving gambling, alcohol and other industries
   • Islamic Fintech Sandbox (Regulatory Sandbox) Expansion Programme

Payment integration in the Halal ecosystem

Leading companies are building an end-to-end Halal economic closure:

• FoodPanda Halal: Show only certified restaurants, support separate billing accounts
• Carsome Syariah car loan: Interest-free instalments through partner Payment Network Malaysia
• AEON Mall RFID Solution: Automatically recognises Halal products and provides fast checkout lanes

Industry analysts predict that Islamic Fintech transaction volume will account for 30% of Malaysia's total digital payments by 2025, growing at a CAGR of 45%.

Part VI: Breakthroughs in Cross-Border Payments

ASEAN QR Code Interoperability Accelerates

As an important milestone in ASEAN's financial integration, Bank Negara Malaysia announced:

✓ System interfacing with Thailand and Indonesia has been completed
✓ Singapore, Philippines access enters testing phase
✓ Reduce the cost of a single cross-border transaction by more than 60%

Typical cases include:

• KL Sentral station now supports direct scanning of Thai QR codes for ticket purchases
• Johor Bahru merchants widely accept code-sweeping payments from Singaporean tourists
• Sarawak Border Bazaar Realises Real-Time Rupiah-Minggit Conversion Settlement

RippleNet's deep presence in the Malay market

Blockchain cross-border remittance company Ripple has recently made key progress:

1. Collaboration with CIMB Bank on core system upgrades
2. Processed over 10,000 Philippine/Bangladeshi remittances daily
3. Pilot RTGS (Real-time full settlement system alternative)

Notably, this technology has shortened the average remittance time from 3 days to 90 seconds and reduced the handling fee by 70%, particularly benefiting the foreign labour community.

Part 7: The Wave of Digital Transformation in B2B Payments

The supply chain finance needs of SMEs have given rise to innovative solutions:

Particularly notable among these areMalaysia Digital Economy Corporation(MDEC) led construction of.

🔹 National Trade Finance Data Hub(expected to go live in 2024Q3)
🔹 Unified Commercial Identity (UCI)(Integration of SSM/CTOS data)
🔹 Automated GST/VAT calculation engine

The development of these infrastructures has significantly lowered the threshold for businesses to adopt digital payments. According to SME Bank research:
- B2B e-transaction share jumps from 121 TP3T in 2019 to 411 TP3T in 2023
- SME acceptance of BNPL grows 300%

The next section will continue to analyse the following directions in depth:
▶️ CBDC (Central Bank Digital Currency Pilot Project Progress)
▶ �� Quantitative analysis of the impact of the BNPL regulatory tightening on the industry)
▶️ New Payment Infrastructure Concept for the Web 3.0 Era

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