The cards and payment market in Malaysia includes payment cards, online payments, P2P payments, and newer payment technologies such as mobile wallets and contactless. It was observed that the use of cash still remains relatively high in Malaysia and the payment technology is expected to grow rapidly over the coming years. Therefore, the Malaysian banks are providing payments products and services that are as easy to use, convenient, and secure to actively promote digital payments. Majority of the merchants are promoting card adoption with reward programs and benefits to encourage consumers to use their cards. Malaysia’s e-commerce market will witness a huge growth compared to the other Southeast Asian countries in the cards and payments sector in the near future. Malaysian cards and payments industry operations include credit transfers, payment cards, cash, direct debits, and cheques. The leading banks in Malaysia are Maybank, Bank Simpanan Nasional, CIMB Bank, Hong Leong Bank, Public Bank, Citibank, HSBC, Bankcard, AmBank, Global Payments, Visa, Mastercard, American Express which offer sophisticated cards and payment services such as contactless technology.
Bank Negara Malaysia (BNM) is actively supporting the development of Fintech in Malaysia by participating in events and regulatory training to help Fintech understand the regulatory landscape in the country. The country has created awareness among the population about the use of payment cards, electronic funds transfers and online banking services. Malaysia’s central bank has educated the population about the benefits of using financial cards, safe practices when using financial cards and going cashless. The country has also implementing PIN-enabled payment cards, an extra security measure for payment cards. The growth in the payment cards in Malaysia is expected to witness a positive growth over the coming years. A strong growth is expected in the category of debit cards compared to the other financial card categories.
According to the study “The Cards and Payments Industry in Malaysia: Emerging trends and opportunities to 2020”, the rural population in Malaysia depended on cash for the majority of their transactions. The government and banks provided basic financial and banking services while expanding banking infrastructure, launching new branches, promoting agent banking networks, and making efforts to change consumer payment habits. The payment cards such as debit cards, credit cards and charge cards were gradually accepted and massive growth in this sector was observed. Majority of the Malaysians are using their debit cards for cash withdrawals at ATMs rather than payments at merchant outlets. To encourage the consumers to use their debit cards at the merchant outlets for payments, the central bank in Malaysia plans to establish 800,000 point of sale (POS) terminals by the year 2020.
The growing preference for secure electronic payments and increasing young population in Malaysia using smartphone has encouraged banks to develop sophisticated payment service options and providers. To encourage contactless payments, Malaysian banks are launching innovative electronic products. Samsung Electronics launched its Samsung Pay mobile wallet and Visa launched Visa Checkout in Malaysia. Maybank collaborated with Visa and launched an NFC wristband and Maybank Visa Payband to enable its customers to make payments with a wave of the wrist.
The central bank of Malaysia, Bank Negara Malaysia (BNM) and its auxiliary Malaysian Electronic Clearing Corporation Sdn Bhd (MyClear) has launched the JomPAY service to promote electronic payments. This JomPAY is a Malaysian government initiative supported by 42 banks offering a common payment platform for Malaysian consumers to make bill payments using online free of cost or mobile banking to any JomPAY-registered merchant using a savings account, current account or a credit card. BNM also launched the e-Payment Incentive Fund (ePIF) that helps the banks to divert check processing fees to encourage consumers to adopt e-payments.
Malaysia’s contactless card technology has encouraged many consumers and currently reached a maximum penetration. The complete migration of payment cards to EMV standards with contactless functionality and awareness education by Malaysia’s central bank has increased in the contactless card penetration among Malaysian consumers. All major banks such as Maybank, Bank Simpanan Nasional (BSN), CIMB Bank, Public Bank, and Hong Leong Bank are offering contactless cards to all their consumers.
New opportunities in the payments industry such as adoption of Open Application Programming Interfaces (APIs), growth in digital payments, innovation in cross-border payments, and challenges from the entry of alternative service providers are impacting the Malaysian cards and payments industry. Almost all the consumers are becoming increasingly accustomed and benefitted to using cards for paying their transactions. Majority of the consumers own several credit cards and debit cards because they are a safe way to pay for purchases or make payments. It was observed that cards and payments industry in Malaysia is developing with technology, demographic, and regulatory dynamics.
Key Topics Covered in the Report:
Malaysia Bill Payment Market Research
Malaysia Money Remittance Industry
Alternative Payment Methods in Malaysia
Malaysia Cards and Payments Industry Trends
Consumer Payment Industry Malaysia
Malaysia Credit Card Industry Analysis
Malaysia Plastic Money Market
Malaysia Credit Cards Market Research
Malaysia Cards and Payments Market Research Report
M-Commerce Market Malaysia
Ecommerce Payment Industry Malaysia
Malaysia Payment Industry
Wallet Payment Market Malaysia
Plastic Card Money Malaysia
P2P Payments Malaysia
Online Payment Channels Malaysia
Debit Cards Market Malaysia
Credit Card Demand in Malaysia
Credit Card Demand Future Outlook Malaysia
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Ankur Gupta, Head Marketing & Communications