Fave

Understanding Fave: A Malaysian Fintech Leader

Fave Asia Technologies Sdn. Bhd., incorporated in Malaysia in 2011, stands as a prominent fintech platform within Southeast Asia. Originally founded as a fitness subscription service named KFit in 2015 by serial entrepreneur Joel Neoh, the company significantly pivoted its strategy in 2016. This shift involved the acquisition of Groupon's operations across Malaysia, Singapore, and Indonesia, leading to its rebranding as Fave in 2017.

In April 2021, Fave's journey took another major turn with its acquisition by Pine Labs, a leading Indian fintech unicorn, in a deal valued at over US$45 million. While Joel Neoh stepped down as Chief Executive in March 2023, co-founder Yeoh Chen Chow now leads the company, supported by regional general managers, including Aik Kuang Heng for Malaysia. Headquartered in Mont Kiara, Kuala Lumpur, Fave maintains its strong local presence.

Fave operates on a dual-sided marketplace model, effectively connecting consumers with a vast network of merchants. For consumers, the platform offers a convenient QR payment application featuring attractive cashback rewards, deals, and crucially, Buy Now, Pay Later (BNPL) services. On the merchant side, Fave provides a digital platform known as FaveBiz, equipping small-to-medium enterprises (SMEs) with payment acceptance capabilities, loyalty programs, insightful analytics, and effective marketing tools. This comprehensive approach targets digitally-savvy consumers and SMEs across diverse sectors such as food and beverage, retail, beauty and wellness, fitness, and travel.

Fave's Financial Services: More Than Just Payments

It is crucial for Malaysian consumers to understand that Fave does not offer traditional loan products such as personal loans or business loans in the manner of conventional financial institutions. Instead, Fave focuses primarily on payment processing services and short-term BNPL arrangements. This distinction is vital for managing financial expectations.

Core Payment Products: FavePay

FavePay serves as the cornerstone of Fave's consumer-facing offerings, enabling seamless digital transactions:

• QR Code Payments: Users can make quick and secure payments at participating merchant locations by scanning a QR code.
• Card Linking: The platform supports direct linking with major credit and debit cards, including Visa, Mastercard, and American Express, eliminating the need for e-wallet top-ups.
• E-wallet Connectivity: Fave also integrates with popular local e-wallets such as Grab, Boost, and Touch 'n Go, offering flexibility.
• Cashback Rewards: A key differentiator, FavePay offers attractive cashback rewards of up to 20% at participating merchants, directly benefiting users on their purchases.

Buy Now, Pay Later (BNPL) Services: FavePay Later

Launched in June 2021, FavePay Later is Fave's flagship BNPL service, providing an alternative payment solution for consumers:

• Interest-Free Installments: For purchases made through FavePay Later, users can split their payments into three equal monthly installments. These installments are interest-free, provided payments are made on time.
• Credit Assessment: Eligibility and credit limits for FavePay Later are determined through an individual assessment process, considering factors like user evaluation and payment history. Industry comparisons suggest typical credit limits may range from RM1,500 to RM5,000, depending on creditworthiness.
• No Fees (for on-time payments): A significant advantage is the absence of additional fees for consumers who adhere to their payment schedule.
• Late Payment Penalty: Should a payment be delayed, a penalty of 1.5% of the outstanding amount will be applied after seven days past the due date. This emphasizes the importance of timely payments.
• Merchant Network: FavePay Later is widely accepted across a robust network of over 40,000 locations in Malaysia and Singapore.

Beyond its core FavePay Later offering, Fave has also expanded its BNPL capabilities through integration with PayLater by Grab. This partnership offers consumers more flexible payment options, including four, eight, and twelve-month installment plans at selected merchants, further diversifying the choices available to Malaysian shoppers.

eCards and Gift Cards

Fave's eCards provide an additional layer of value, offering instant bonus cashback on purchases. These cards offer flexible spending options through FavePay integration and can be redeemed either for specific merchants or across the entire Fave platform, adding another dimension to its rewards ecosystem.

Navigating Fave: Application, App Experience, and Regulation

Application Process and Requirements

Accessing Fave's services is straightforward, primarily facilitated through its mobile application:

• Mobile Application: The Fave app is readily available for download on both iOS and Android platforms via their respective app stores.
• Registration: Users can register using their email address or phone number, or by linking their social media accounts for a quicker setup.
• KYC Process: Identity verification, a standard Know Your Customer (KYC) procedure, is typically completed by linking existing payment methods such as credit or debit cards.
• Card/E-wallet Integration: To utilize FavePay and FavePay Later, users must link their existing credit/debit cards or e-wallets to their Fave account.

Eligibility for FavePay Later's BNPL services is determined by Fave's proprietary assessment algorithms. This evaluation considers a user's FavePay usage history, transaction patterns, account status, payment behavior, and the validity of their linked credit/debit cards and banking relationships. While specific methodologies are not publicly disclosed, the system aims to provide responsible credit limits.

Mobile App Features and User Experience

The Fave mobile application is central to its user experience, with generally positive feedback:

• Ratings and Downloads: The app holds a respectable 4.2-star rating on both the Apple App Store (from over 44,000 reviews) and the Google Play Store (with over 1 million downloads on Android).
• Key Features: Users appreciate features such as deal discovery and redemption, seamless QR payment processing, clear cashback tracking and rewards, convenient BNPL payment options, and a helpful merchant location finder.
• Positive Aspects: Reviews frequently highlight the excellent cashback rewards, wide variety of merchants, the convenience of not requiring top-ups (unlike some e-wallets), and a generally user-friendly interface.
• Common Complaints: Some users have reported issues with credit card linking, particularly with certain banks. Other criticisms include occasional slow app performance, a perceived cluttered interface, and varying responsiveness from customer service, with some experiencing delays of 3-5 working days for support.

Regulatory Status and Licensing in Malaysia

A critical point for Malaysian consumers to understand is Fave's regulatory positioning. Fave operates as a payment facilitator and technology platform, but it does not hold a banking license from Bank Negara Malaysia (BNM). This means Fave does not directly act as a traditional bank or lending institution.

Instead, Fave functions under e-commerce and technology services registration, relying on strategic partnership agreements with licensed banks and payment processors to facilitate its financial services. While it complies with e-money regulations for its wallet services, it is important to note that Fave was not among the five consortiums granted digital banking licenses by BNM in 2022. This operational model requires Fave to comply with BNM regulations for payment services, Anti-Money Laundering (AML) requirements, the Personal Data Protection Act (PDPA) for customer information, and broader consumer protection measures under the Malaysian financial services framework.

Fave in the Malaysian Market: Competitors and Borrower Advice

Market Position and Competitive Landscape

Fave holds a strong market position within Malaysia's dynamic fintech ecosystem. Its primary competitors in the digital payments and BNPL space include:

• Grab: With GrabPay and GrabPay Later.
• Shopee: Offering ShopeePay and SPay Later.
• Touch 'n Go: A dominant e-wallet service.
• Boost: Another widely used mobile payments platform.
• ShopBack: A prominent cashback platform.

Fave differentiates itself through several key advantages. Its strong focus on SMEs, with over 70% local merchant partnerships, fosters a vibrant local economy. The integrated loyalty and payments ecosystem, coupled with generous cashback rewards often reaching up to 20% (significantly higher than competitors' typical 1-5%), provides compelling value. Furthermore, the convenience of direct card linking without requiring a top-up sets it apart from many e-wallets.

The company has demonstrated robust growth, reporting 40% quarter-on-quarter growth in transaction volume by late 2022 and achieving its highest-ever transaction volumes that year. With over 6 million users across Southeast Asia, including more than 2.5 million users in Malaysia as of 2019, Fave continues to expand its reach and influence, especially following its acquisition by Pine Labs.

Practical Advice for Potential Borrowers

Given Fave's unique offerings, potential users in Malaysia should consider the following practical advice:

• Understand BNPL is Not a Traditional Loan: FavePay Later provides installment plans for purchases, not cash loans. It is designed for budgeting expenses, not for obtaining immediate liquidity or managing long-term debt.
• Manage Payments Diligently: While FavePay Later is interest-free, failing to make payments on time will incur a 1.5% late payment penalty after seven days. Set reminders and ensure your linked card has sufficient funds for automatic deductions.
• Know Your Credit Limits: Be aware of the individually assessed credit limit for FavePay Later, which typically ranges from RM1,500 to RM5,000. Do not overextend yourself, even if the option is available.
• Utilize Cashback Wisely: Take full advantage of the generous cashback rewards. This can lead to significant savings over time, especially for frequent shoppers at participating merchants.
• Review Merchant Acceptance: While Fave has a broad network, always confirm if a specific merchant accepts FavePay or FavePay Later before making a purchase, especially if you plan to use BNPL.
• Be Mindful of App Performance and Support: While the app is generally well-regarded, be prepared for occasional technical glitches or slower customer service response times, as noted in some user reviews.
• Protect Your Data: As with any digital financial service, ensure your personal and payment details are secure. Fave operates under Malaysian data protection acts, but vigilance is always important.
• Consider Your Financial Health: Use BNPL services responsibly. They are a convenient payment tool, but consistent reliance on installments for everyday purchases can strain your budget if not managed carefully.

Fave has firmly established itself as a dynamic and innovative player in Malaysia's digital payment and BNPL sector. By understanding its specific offerings, regulatory framework, and adhering to responsible financial practices, Malaysian consumers can effectively leverage Fave's platform for enhanced shopping experiences and savings.