Malaysia is launching a program on Wednesday (Jan. 15), according to reports, to give out 450 million ringgit (more than $110 million USD) to half of its citizens. The program intends to bolster the country’s digital payments, a jolt to get things off the ground.
The program is expected to be a big boost for eWallet companies. The money will be given out through eWallet operators Grab, telecom company Axiata’s Boost, China’s Ant Financial and Touch ‘n Go, backed by banking group CIMB.
The way the program works: Every Malaysian citizen over the age of 18 who makes under 100,000 ringgit per year will receive a one-time handout of 30 ringgit each, which must be spent between Jan. 15 and March 14. The program was budgeted for action in October, and stands to benefit around 15 million Malaysians. It was designed to widen digital payments among both consumers and merchants in the country, particularly to benefit small businesses, according to Minister of Finance Lim Guan Eng.
Data portal Statista said total digital payments are expected to surge by 10.8 percent after the program’s implementation, and reach around $17 billion over the next three years — once people catch on to the practice.
Another benefit the program could see is offset concerns about the cost of living, which will help the government. Last year, the ruling coalition lost an election by a larger margin than expected over the issue.
Lim said the initiative was part of the government’s idea to help the shared prosperity agenda by reducing the barriers to digitization. By doing so, it could also improve financial inclusivity, and get everyone on board.
There is a push for digital banking in many Asian countries, and the primary move is one toward a more modern form of banking over traditional in-person cash-handling. Several groups in the area are vying for digital bank licenses in Singapore, and Thailand’s Siam Commercial Bank, which is over 100 years old, is modernizing with new apps and connectivity as well.