Malaysia’s second largest bank CIMB Group Holdings Bhd‘s subsidiary Touch ‘n Go (TNG) will form an equity joint venture with Alipay, the online payment arm of parent Ant Financial Services Group, to provide mobile wallet and related financial services.
Asean-focused bank CIMB’s unit TNG will be the majority shareholder in the venture that marks Ant Financial’s first investment in Malaysia.
“The capital injected by both parties will go towards the creation of a world-class online and offline payments provider, delivering superior mobile wallet solutions and other related financial services,” a joint statement on the Malaysian stock exchange said on Monday.
The details of capital injected in the new venture were not disclosed.
The strategy for Chinese ecommerce giant Alibaba–affiliate Ant Financial is similar to the partnership or capital infusion route that it has taken in other geographies like India. There, it has partnered with Paytm, a leading player in the segment, to capture the growing online payment market with a sizeable middle class and increasing spending power.
Apart from India, Ant Financial is enabling local partners in South Korea and Southeast Asia to provide digital payment and innovative financial services to local users.
“The JV will leverage the respective partners’ local market insights, technology capabilities, market experience, and brands to introduce a world-class mobile platform for payments and other financial services, directly supplementing Malaysia’s efforts in accelerating the creation of a robust and secure digital payment infrastructure,” the statement said.
Currently, TNG claims that millions of users across Malaysia use Touch ‘n Go cards daily for electronic payments at toll roads, public transportation systems, and parking and retail outlets. The proposed e-wallet is set to play in this ready-to-go market where current and new TNG users can access these services on their mobile phones, including for ecommerce.
“Along with the launch of the JV, individuals as well as SMEs will be able to benefit from the development of technology. They will be able to purchase or do business in a more convenient and efficient way in both domestic and international markets, enjoying a broader range of services,” said Eric Jing, CEO, Ant Financial.
Ant Financial provides a wide range of digital financial services to over 520 million users in China and outside. Over 10 million brick-and-mortar merchants now accept Alipay across China.
Meanwhile, Malaysia is also the first country to join the Electronic World Trade Platform (eWTP), a program initiated by Alibaba Group executive chairman and founder Jack Ma to help small and medium-sized enterprises (SMEs) expand their trading capabilities worldwide more easily.
During a visit to Malaysia earlier this year, Ma announced plans to set up a regional distribution hub in the country.