Malaysia’s digital payment market is undergoing a transformation, and Indian fintech startups are playing a pivotal role in this revolution. With a favorable regulatory environment and increasing demand for digital financial services, Malaysia has become a strategic destination for Indian fintech companies. While these startups have made significant progress, particularly in the digital payments space, there remains a vast opportunity for growth in areas like insurance, credit management, and short-term lending.
Indian Fintechs Making Their Mark
Indian fintech companies have rapidly established themselves in Malaysia’s evolving digital landscape. Razorpay, a prominent Indian payment solutions provider, exemplifies this trend. Razorpay’s acquisition of Curlec, a Malaysian recurring payment solutions provider, was a strategic move that has since paid off. Now operating as ‘Curlec by Razorpay,’ the company has expanded into a comprehensive digital payment gateway, serving over 700 businesses, including notable clients like Tune Protect and Mary Kay.
Curlec by Razorpay has also become an integral part of Malaysia’s DuitNow service, a real-time payment system akin to India’s Unified Payment Interface (UPI). This service allows for fund transfers using mobile numbers and national IDs, pushing the adoption of cashless transactions across Malaysia. This initiative aligns with Bank Negara Malaysia’s (BNM) vision of a cashless society, a goal that is becoming increasingly achievable thanks to innovative players like Razorpay.
Another Indian fintech making significant strides in Malaysia is Pine Labs, known for its point-of-sale (POS) systems and digital payment platforms. Pine Labs has successfully introduced its technology to Malaysia, supporting both small businesses and large enterprises. By doing so, Pine Labs has contributed to the expansion of Malaysia’s digital payment infrastructure, offering consumers enhanced flexibility and security in their transactions.
Regulatory Support: A Key Driver of Success
The success of Indian fintech startups in Malaysia can be largely attributed to the country’s supportive regulatory framework. Malaysian authorities, particularly Bank Negara Malaysia, have been proactive in fostering innovation within the fintech sector. The Financial Sector Blueprint 2022-2026, introduced by BNM, underscores the importance of open data ecosystems, national digital identity schemes, and real-time payment linkages. These initiatives have laid a solid foundation for digital payments and have encouraged foreign fintech companies to establish a presence in Malaysia.
Moreover, the Malaysian government’s exploration of Central Bank Digital Currencies (CBDCs) and the impending regulatory framework for digital insurers and takaful operators highlight the country’s commitment to advancing its fintech sector. This regulatory foresight ensures that Malaysia remains an attractive destination for fintech investment, especially for Indian companies looking to expand their global footprint.
Exploring Untapped Potential in Financial Products
While Indian startups have made remarkable progress in Malaysia’s digital payment market, there remains untapped potential in other financial sectors, particularly in insurance. The upcoming regulatory framework for digital insurers and takaful operators presents a golden opportunity for Indian fintech firms to diversify their offerings. By venturing into digital insurance, wealth management, and other financial services, these companies can strengthen their foothold in Malaysia.
This potential is especially evident as Malaysia’s first digital banks are set to launch, promising new levels of innovation and financial inclusion. Indian fintech companies, with their proven expertise and experience in other markets, are well-positioned to capitalize on this emerging sector. Expanding into digital insurance and other financial products would not only meet the growing demand but also contribute to a more comprehensive financial ecosystem in Malaysia.
The Future of Indian Fintech in Malaysia
The vision for Malaysia’s fintech landscape, as outlined in BNM’s 2022–2026 Blueprint, includes the adoption of digital currencies through Central Bank Digital Currencies (CBDCs). While this presents a significant opportunity, it also requires a cautious, data-driven approach to protect Malaysia’s financial interests. Indian fintech and crypto startups possess the necessary expertise to contribute meaningfully to this area, benefiting both India and Malaysia.
Indian fintech startups have firmly established themselves in Malaysia’s digital payment market, leveraging a supportive regulatory environment and a growing demand for digital financial services. However, the journey is far from over. With the forthcoming regulatory frameworks and the vast untapped potential in insurance, credit management, short-term lending, and other financial products, Indian fintech firms have a unique opportunity to further expand their influence and contribute to Malaysia’s evolving fintech landscape. As these companies continue to innovate and adapt, they are set to play a crucial role in shaping the future of Malaysia’s financial services industry.
(With inputs from agencies)
