Strengthening online financial security in Malaysia's digital age

Alain Yee, chief executive of ShopeePay, says MyDigital ID can help make it harder for scammers to steal someone's identity.

KUALA LUMPUR: As Malaysia accelerates into a more digital future, online financial security has become a pressing national concern.

For Alain Yee, chief executive of ShopeePay, the solution lies in stronger integration and responsible growth. That is why he welcomes collaboration with MyDigital ID.

MyDigital ID is a national digital identity platform positioning itself as the backbone of secure authentication across banking, fintech and public services.

The government hopes it can become a powerful tool to combat fraud. Royal Malaysia Police data shows reported e-financial fraud cases rose from 1,812 in 2024 to 5,159 in 2025. Reported losses surged from RM65.5 million to RM458.7 million in just one year – a sixfold increase.

Last week, Shopee was among 15 banks, e-wallet providers and fintech firms that signed memoranda of understanding with MyDigital ID to roll out e-Verification.

“Our platform’s integration with MyDigital ID can be completed very quickly,” Yee said. “Speed, however, is only part of the equation.

“We are very excited as it can help prevent scams and fraud, which are becoming increasingly prevalent in Malaysia as the country becomes more digital.”

Yee’s sentiments were echoed by Joanne Loh, Finexus Group’s director of strategy and transformation. Finexus is a leading technology and financial services company connecting and serving consumers, businesses, banks and central banks, and has been operating for more than 25 years.

Loh said one of the biggest pain points for customers is onboarding and verification.

“We have been powering efficient and critical financial infrastructure, but strengthening identity verification is equally vital,” she said.

“We have all seen the use of selfie verification and similar tools, but through integration with MyDigital ID, platforms can streamline authentication while raising security standards.

“With this solution, customers can onboard seamlessly and quickly – in as little as 10 seconds.”

System safeguards

ShopeePay is a key player serving underserved communities in Malaysia and ranks among the country’s largest providers of e-wallet services, credit, insurance, buy-now-pay-later (BNPL) facilities, as well as investment products and daily features through its e-wallet.

It has more than 3.5 million users – representing 56.5 per cent of a 6.5 million-user market segment. Yee said the company closely tracks transaction growth, average value per transaction, total transaction value and outstanding balances. The wider market averages RM91 per transaction, with RM3.8 billion outstanding.

Beyond technological integration, regulatory safeguards also play a crucial role in strengthening Malaysia’s financial security framework.

“There have been some challenges in this area,” Yee acknowledged, underlining the importance of strong safeguards.

“A crucial element of Malaysia’s financial security framework lies in regulation. We, as providers, have worked closely with regulators, with further regulatory developments expected later this year.” He said under Malaysia’s BNPL structure, companies are not permitted to charge compounding interest on outstanding balances.

If a customer owes RM500 or even RM10,000 and is late with repayment, the only fee allowed is a fixed charge. Providers cannot profit from compounding late interest.

“Under this regulatory regime – which differs significantly from systems in many Western countries and is, in our view, healthier – the only sustainable business model is to ensure that borrowers are responsible,” Yee said.

“If customers do not repay, it is not viable to continue offering them the service. Unlike in some Western markets, there is no opportunity to generate profit from escalating debt.

“We have no incentive to push customers into debt. We want customers who understand how to manage their finances, who may need support in an emergency, and who use credit responsibly.”

Yee said this is where MyDigital ID can help make it harder for scammers to steal someone’s identity.

“Together, stronger regulation, responsible lending models and improved digital identity integration represent a coordinated push to enhance online financial security,” he said.

“In a rapidly digitising economy, protecting users while maintaining seamless access is essential to sustaining trust in the financial system.”