WeChat, China's most popular social media app, has launched its digital payments service, WeChat Pay, in Malaysia, marking its first product to be released in Asia outside of China and Hong Kong.
Users of WeChatPay will be able to send money to each other and make payments to offline merchants in Malaysian ringgit, functions that suggest the company is aiming to establish a local payment service as opposed to one designed purely for Chinese nationals living abroad.
Tencent, the owner of the WeChat messaging service, is hoping to lure users with the offer of 'free money', virtual money pack worth between $0.95 and $21.70. It also has more than 20m active WeChat users in Malaysia.
However WeChat has yet to form an alliance with any Malaysian bank which could curtail the success of its payment service.
And competition in Malaysia is likely to be fierce given that ride-hailing firm Grab launched its own digital payment service in Malaysia this year. GrabPay has also allied itself to local bank Maybank.
Yet the potential for the growth of the digital payments market in Malaysia is encouraging. While cash remains the dominant means of payment, mobile phone usage is huge. The number of phones exceeds the 32m population by more than 10m.
Furthermore, the Malaysian central bank has sought to encourage greater use of electronic payment channels through the implementation of new policies.