Bridging the financial literacy gap

MANAGING the health of your finances has become more imperative as the pandemic continues to have an impact on the earnings of many Malaysians.

With many facing financial difficulties, spending responsibly is becoming a new normal.

Educating the younger generation with financial literacy before they enter the workforce is becoming more important.

Even prior to the pandemic, many youths in Malaysia have not shown strong financial discipline. Three years ago, Bank Negara stated that 47% of Malaysian youth had high credit card debt.

A global survey by Standard Chartered last year revealed that 74% of millennials in Malaysia found managing their money more difficult since the start of the pandemic.

Financial planner Yap Ming Hui, who runs a wealth management company, says these digital tools in the e-wallet are a foundation for good financial planning management and would help streamline the information on financial expenses for students and businesses.

However, the survey showed that around 28% of millennials have started using a money management or budgeting app since the pandemic began, while another 62% plan to do so in the next three years, in the wake of the Covid-19 pandemic.

To help solve these issues, Kiplepay Sdn Bhd, a subsidiary of tech firm Green Packet Bhd, recently rolled out the Kiplepay prepaid visa card tied to an e-wallet.

Targeting university students, the payment card with money preloaded linked to an e-wallet would soon allow users to track their spending and control their expenses.

Ricky Lew, acting CEO of Kiplepay

According to Kiplepay acting chief executive officer Ricky Lew, the new features would enable better financial literacy and financial management among the youth from an early age.

“Students would be able to view their weekly top spending in their e-wallet, and can even key in their savings goals. The card will also motivate students with incentives such as cashback to help them achieve their goals,” he tells StarBizWeek.

He explains that learning good financial management skills at a young age is not a life skill taught in schools in the country compared to the United States which has included financial literacy as part of their syllabus.

“We will be developing even more financial management solutions for these young students to help them be better at managing money,” notes Lew.

It is important to note that no transaction fee is charged except for the 1% transaction charged for overseas spending.

There are various prepaid cards in the market including AirAsia’s BigPay, Merchantrade Money Visa prepaid card, GoPayz-MAIPk, MRCA Visa prepaid card, eGen Visa prepaid card targeting different segments of the population.

For Kiplepay’s Visa prepaid card, Lew says the newly launched service is one of the first e-wallets with a Visa card in the country targeting students.

“We will be introducing more specific student services and propositions in the near future – stay tuned” points out Lew.

Given its partnership with Visa, students will be able to perform cashless transactions with Visa’s 71 million merchants in over 200 countries.

Last month, Kiplepay teamed up with Visa to introduce this first of its kind prepaid card- Kiple Visa prepaid card.

It is noteworthy that in countries such as Singapore, these prepaid Visa card models have become popular among the youth.

Similar to Kiplepay, the prepaid visa card brand Canvas in the island republic has acted as a teaching tool for the youth to learn how to prioritise allotted pocket money prudently.

Meanwhile, Kiplepay has also expanded its payment and e-wallet solution, with a prepaid card for enterprises – the Kiple White Label prepaid card – a solution for businesses looking to create their own e-wallets with payment solutions within a quick four month’s time frame.

Lew says the prepaid card for enterprises would allow companies to disburse salaries into the e-wallet with a spending Visa card.

“The card will allow employees to manage and control their funds from one location without having to visit a bank and open up a bank account, which can also be a lengthy process,” he adds.

In light of the new normal of different operating hours of banks amid the pandemic, Lew says the prepaid card is a more accessible choice for businesses to manage and track their employees salaries and expenses.

“Today, foreign and gig workers are left behind in the cashless race as it is challenging for them to open new bank account to receive salaries.

“This card linked to the e-wallet will make it more convenient for employers to ensure each employee receives the necessary funds safely,” he explains.

In the last two years, Kiplepay has collaborated with state governments to disburse welfare funds to over 50,000 families through its Kiple-enabled Aid Distribution prepaid cards.

The Kiple platform also allowed the government to track where and how the welfare funds were spent.

The recently launched Kiplepay Visa prepaid card also allows cash withdrawals at bank ATMs, though at a fee of RM2 per withdrawal, which is the same fee other non-bank issued prepaid cards charge.

Nonetheless, Lew says the prepaid card’s objective is not to perform as an ATM card but to be used for cashless transactions amid the acceleration in adoption of digital solutions.

Since the launch last month, Lew says the company has received around 2,000 sign-ups for the prepaid card.

Within a year, he expects to have about 1.5 million customers using the cards.

Undoubtedly, Kiplepay Visa prepaid cards with the upcoming features of financial planning would help upskill the youth in financial literacy.

Financial planner Yap Ming Hui, who runs a wealth management company, says these digital tools in the e-wallet are a foundation for good financial planning management and would help streamline the information on financial expenses for students and businesses.

“It is important to know where you spend and the kind of expenses you have. This kind of tool will help students to determine the essential items in their budget and have a better control on spending money that will tide us through this crisis.

“On a bigger picture, this would help in the digitalisation of financial information on an e-wallet,” adds Yap, who is the founder and managing director of Whitman Independent Advisors Sdn Bhd.

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