This article first appeared in The Edge Malaysia Weekly on February 13, 2023 - February 19, 2023

Since 2018, after Barisan Nasional (BN) lost power, things have not been running smoothly for MyEG Services Bhd.

The provider of e-government payment services had been seen as being politically linked. It became the payment gateway provider for entities such as the Immigration Department and Road Transport Department (RTD).

Hence, when the government changed in 2018, it was uncertain whether the contracts would be renewed. Nevertheless, the contracts, which are short-term in nature, were renewed in 2020 for three-year terms.

Last week, the Immigration Department announced that MyEG’s services with the department would no longer be required from 2025 as the department was migrating to the National Integrated Immigration System (NIISe). Developed by Iris Technology Bhd, NIISe’s mandate is to converge all of the Immigration Department’s systems into one. 

Following the announcement, MyEG’s share price took a hit, which is not surprising as immigration services make up about 35% of its overall revenue. 

However, according to a research house, only 10% of its revenue is related directly to the government concessions, with the rest coming from ancillary services, such as insurance and processing of recruitment permits for foreign workers.

MyEG has a pool of companies and customers that has been using its services for foreign-worker matters for several years now. It is highly unlikely that these customers will move to other providers for its ancillary services.

The same goes for MyEG’s services in relation to the RTD. At a few clicks of the mouse, road tax renewal and insurance purchase are done and the documents are delivered to one’s house or office. The ease of doing business has enabled MyEG to enlarge its customer base.

So chances are that MyEG will be able to survive even without government concessions. 

Moreover, there is a need for listed companies to pivot towards a business model that is less dependent on government concessions. Such deals increase scrutiny on the company and the returns are not going to be lucrative. Companies can no longer be dependent on such deals. (See also “Business as usual for MyEG despite fears it could lose its government concession” on Page 12.)

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