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PayNet, the national payments network, has launched a three-month fintech e-payments accelerator scheme. The programme aims to incentivise fintechs to help improve financial inclusion in Malaysia through addressing three problem statements:
- Increase the adoption of e-payments to the unbanked.
- Improve existing products to be more appealing to consumers.
- Introduce new products to reach new consumer segments.
The programme invites interested parties to submit their ideas to solve these problems, with shortlisted applicants advancing to a pitching session in June where they will compete to progress to a proof of concept (POC).
Successful teams will be awarded a grant of up to RM500,000 (£88,000) to support the execution of the POC and will have the opportunity to work with PayNet’s ecosystem of banks, e-wallets and third-party acquirers.
Peter Schiesser, group CEO of PayNet, said: “This Programme is timely and relevant as part of our efforts to develop a future ready digital payments infrastructure and help Malaysia transition towards a digital economy. I urge potential FinTechs to seize this opportunity to showcase their solutions and partake in expanding the country’s digital ecosystem and advancing financial inclusion.”
Overcoming problems for start-ups
Although data from the World Bank shows the majority of Malaysians either have access to a financial account or mobile money service provider, there remains a sizable proportion of at least 10 percent that have neither, with regulators keen to bridge that gap through innovation.
In addition, although non-cash transactions in Malaysia grew by a compound annual growth rate (CAGR) of 20 percent between 2016 and 2020, reaching 170 transactions per capita, this is still someway behind many developed markets. Malaysia is still primarily a cash dominated society.
According to APAC VIXIO analyst Prasad Thandapani: "Malaysia's payments market is dominated by big players, so the accelerator is a good idea to help promote innovation and new thinking."
Other projects such as the regulatory sandbox, which has had 23 applicants since its inception in 2016, as well as a blueprint for fostering more dynamism in the financial sector, shows this is a priority for regulators.
Zennon Kapron, director of fintech consultancy Kapronasia, told a recent VIXIO webinar, Unlocking growth in new payments markets, that the astute nature of the South East Asian consumer contributed to high customer acquisition costs, making it difficult for smaller and non-local fintechs to get a foothold in the market.
The region is notable, for example, as a place where Uber failed to gain a strong foothold due to local established competition, such as Grab.
For payments fintechs that can secure a place in PayNet’s accelerator programme, the combination of upfront capital with expert help from established firms, could be a launch pad to help them gain a foothold in the market. If all goes to plan, it should also support policy goals to grow financial inclusion in the country.
