Razer Pay e-wallet and Razer Card have been discontinued in both Malaysia and Singapore, and these services will come to a halt after September 30, 2021.
All Razer Pay e-wallet functions will also be suspended after August 31, 2021, so users can no longer top-up, pay or transfer, and the app will be inaccessible from October 1, 2021. Razer Pay has had a 3-year beta run in Malaysia since its launch in July 2018 with the branding of being the “e-wallet for youth and millennials”.
But as we now know, it didn’t quite take off with its target group of Malaysians, especially with the red sea of e-wallet competitors it went up against here. We took a look at 5 possible factors behind why it pulled the plug on its stay here.
1. An e-wallet in the lifestyle category that didn’t fulfil enough needs
For starters, there are many types of e-wallets in Malaysia, and Razer Pay falls under the lifestyle e-wallet category, which is probably the largest category. There, it faced strong competitors like Boost, GrabPay, and Touch ‘n Go eWallet, to name a few.
But compared to them, it lacked features that helped it stand out in the category. With the big 3, you’re able to find additional features like investments, insurance deals, home services, travel deals, parking payments, and more.
Razer Pay had ambitions to deliver similar experiences, of course. When it first launched, it had shared plans of wanting to include more partners from the healthcare and travel sectors in its list of merchants. Unfortunately, the decision to remove itself from the competition came before that plan came to fruition.
GrabPay, Boost, and Touch ‘n Go eWallet all launched sometime from 2017-2018, around the same time as Razer Pay’s launch, but evidently, the latter fell behind due to the disparity between its developments and that of the others.
2. Offered promotions in less popular usage categories
As of Q3 2020, the most popular usage of e-wallets among Malaysians is for F&B, which stands at a 24% majority among other categories of usage like groceries, convenience stores, food delivery, bill payment, etc. It’s reasonable to assume that it was a dominant category from the start.
Yet, it wasn’t quite the focus of Razer Pay. Its promotions and cashback deals were instead geared towards bill payments, gaming equipment, and mainly for convenience stores like 7-Eleven. This meant that, with so many other more versatile e-wallets to pick from, there was little incentive to download and use Razer Pay just for these deals.
3. Other e-wallets offered better deals from the same merchants
While Razer Pay clinched partnerships with some big brands like 7-Eleven, Tealive, Starbucks, 99 Speedmart, Secret Recipe, etc., other e-wallets didn’t miss out on partnerships with them either. It still remains an extremely competitive landscape.
But despite these partnerships, Razer Pay was unable to make its promotions stand out. The other e-wallets ended up having more attractive deals with these partners.
For instance, Razer Pay offered 8-10% discounts for 7-Eleven and Starbucks earlier this year. However, Touch ‘n Go eWallet is now offering a 20% cashback or a random RM500 cashback for selected recipients for 7-Eleven, and GrabPay occasionally has 30-50% discounts for various food delivery merchants including Starbucks. Additionally, Starbucks has even more discounts for a variety of things on their GrabFood merchant page.
4. Didn’t leverage the e-commerce trend well enough
Additionally, a lot of Razer Pay’s merchants were offline stores with weaker e-commerce efforts. This wasn’t the best move, considering the pandemic and rise of e-commerce later on.
For an example of an e-wallet that leveraged the changing trends right, we can look at Touch ‘n Go eWallet, which has many promotions for Zalora and Lazada. Tapping into platforms that people are already actively using is a move that’s strategic and makes sense.
5. Its e-wallet niche was unsustainable
Every popular e-wallet has an area it specialises in to help it stand out in the saturated market—GrabPay with food deliveries, Touch ‘n Go eWallet for tolls payment top-ups and parking), and so on.
On the other hand, not only did Razer Pay have mediocre lifestyle offerings, but its stand-out point was as an easy payment method for game-related purchases. Therefore, it’s likely that hardcore gamers were some of its first adopters.
The downside of this is that not even gamers are making such purchases every day, and it’s just too niche of a target market for an e-wallet to sustainably rely on.
-//-
We’re not saying that e-wallets have to have all the above features in order to be considered a lifestyle e-wallet. But if that’s where an e-wallet is trying to position itself, it had better be prepared to do better than its competitors.
Users have limited attention spans and (sometimes) limited space in their devices—they will only opt to keep the most useful choices around.
Ultimately, Razer Pay didn’t have the advantages of being the first or the best, was just too slow in catching up to its competition, and wasn’t driving adoption in the right way.
One way Razer Pay tried to push for adoption was via its support campaign for local SME merchants during the pandemic. If new or existing users made a purchase with Razer Pay, they gave out a free surgical mask per day or per month.
It was an unattractive deal compared to cashbacks, discounts, and free deliveries, which the other e-wallets offered in their SME support campaigns. On top of that, Razer Pay’s campaign only lasted a while with no new ones announced, whereas GrabPay and Boost have been regularly updating their incentives to encourage adoption and spur users to buy from SMEs.
However, Razer Fintech still has a strong arm, payment gateway Razer Merchant Services (RMS). In 2020, it generated US$4.3 billion in total payment volume (TPV), which represented a 104.4% increase YoY, signalling potential in their fintech ventures even if Razer Pay and Card didn’t pan out as planned.
As of now, Razer has shared that it’ll be focusing more on its B2B business (which includes RMS). On top of that, Razer Fintech is looking to expand its “Razer Youth Bank” into Malaysia. Li Meng, Razer’s Chief Strategy Officer, found that Malaysia’s large demographic of over 6 million youth appealing, and believes that the “youth and millennials demographic segment is among the most underserved Malaysia”.
Editor’s Note: Parts of this article have been edited to reflect greater accuracy of statements.
- You can read more articles about Razer that we’ve written here.
Featured Image Credit: Min Liang Tan, founder of Razer