The fierce e-wallet battle in Southeast Asia, an organization with greater than 1.1 million customers has given up on the sport

Razer, primarily a gaming {hardware} maker, will discontinue its Razer Pay e-wallet on the finish of September. This occasion may trigger different tech firms to rethink their e-wallet methods and paving the best way for business consolidation.

Excessive buyer acquisition prices weigh closely on the shoulders of issuers. Razer stated it should slender its focus to B2B digital funds, which supplies fee processing companies to retailers.

Mr. Lee Li Meng, Chief Technique Officer of Razer shared that e-wallet enterprise in Southeast Asia consumes some huge cash in person acquisition, a B2B-oriented method can open up alternatives. .

Razer Pay was first launched in Malaysia in July 2018, then Singapore in March 2019, attracting a complete of 1.1 million customers.

Ranging from a fee service that permits avid gamers to purchase gaming objects on-line. The corporate then expanded the service to offline shops reminiscent of comfort shops and even merchandising machines. Razer Pay advertises itself as “an digital pockets for younger individuals and millennials”, geared toward youthful customers, together with these and not using a checking account or bank card.

However the competitors on this discipline is getting fiercer. Like Razer, many tech firms have entered the e-wallet recreation as an extension of their current companies.

In Malaysia, as of October final yr, there have been 53 e-wallet suppliers, of which 47 have been non-banks (as reported by S&P International).

The biggest e-wallet operators in Southeast Asia embrace Seize (Singapore) and Gojek (Indonesia). The 2 firms are actively increasing GrabPay and GoPay because the core of their “tremendous app” technique. There’s additionally MoMo (Vietnam); Conventional banks like DBS Group Holdings even have a robust presence.

Notably, the enormous Sea (Singapore) has considerably expanded within the e-wallet phase over the previous yr because the COVID-19 pandemic promotes digitization. The corporate spent as a lot as $166 million on advertising and marketing its digital finance enterprise in Q2, together with cashback campaigns, which resulted in a $159 million quarterly working loss.

“For a platform that’s primarily centered on gaming, convincing each current Razer customers and, extra importantly, new customers to make use of Razer Pay is extraordinarily tough and costly,” stated Zennon Kapron, director. Kapronasia’s monetary analysis agency in Singapore stated.

“Razer appears to have realized that persevering with to develop the e-wallet enterprise is each costly and distracting from its core enterprise of video games.”

Certainly, Razer appears to be extra centered on gaming, which has grown steadily throughout the pandemic. Within the first half of the yr, the Hong Kong-listed firm reported a internet revenue of practically $34 million in contrast with a lack of $17.three million in the identical interval final yr.

In the meantime, the main focus of the Southeast Asian e-wallet battle is shifting to the subsequent part. E-wallet operators hope so as to add different companies reminiscent of on-line lending and microinsurance to scale their fintech companies. As Sea has acquired a financial institution in Indonesia to supply digital banking companies within the nation.

Razer can be on the identical web page. The corporate has utilized for a digital banking license in Singapore. “We all know that in the long run, e-wallets with fee makes use of will probably be very tough to compete within the area with bigger gamers,” a Razer govt informed Nikkei Asia.

However Razer misplaced its digital banking bid to Sea and Seize, prompting the corporate to rethink its shopper fintech technique. With Razer making ready to withdraw, the stress is rising on different e-wallets.

“Losses look like mounting for know-how firms,” S&P International evaluation stated in a be aware, noting that income from fee companies stays restricted.

“The e-wallet market may see consolidation and tech firms may merge with one another or collaborate extra carefully.”

“To achieve success in e-wallet enterprise in Asean, firms do not essentially have to achieve the benefit of scale, however can construct an ecosystem. The case of Tencent Holdings’ WeChat Pay is profitable as a result of hundreds of thousands of Chinese language persons are Chinese language. use this app not solely to pay for issues but in addition to speak with mates and be entertained,” Krapin stated.

“The pockets that has the power to encourage customers to make use of the platform each day would be the winner.”

Hua Van