Malaysia Payments Market - Growth, Trends, COVID-19 Impact and Forecasts (2022-2027)

The Malaysia Payments Market is Segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality).

Market Snapshot

Malaysia Payments Market Overview
Study Period: 2022-2027
Base Year: 2021
CAGR: 11.04 %

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Market Overview

The Malaysian payments market is expected to register a CAGR of 11.04% from 2022 to 2027 on account of the Malaysian government's plans to implement a digital tax on cross-border e-commerce beginning in 2020, which could have an impact on international sellers of digital products.

  • Alibaba, a Chinese conglomerate, has announced plans to establish a regional distribution hub in the country. Jack Ma, the company's co-founder, has also been appointed as Malaysia's digital economy advisor.
  • Bank transfers are the primary driver behind the Malaysian e-commerce economy, accounting for 44% of transactions in 2019 and expected to remain stable in the coming years. This is true in Malaysia for both B2C e-commerce and B2B payments. Maybank tends to dominate transfers, bank penetration in Malaysia is 85%, and many domestic banks, such as CIMB Clicks, have launched their own branded transfer options.
  • iPay88 is the leading provider of online payment services to Southeast Asian merchants. It accepts all major credit cards, as well as e-debit and e-money, and merchants can transfer funds to local bank accounts. Customers can pay in MYR and choose between two subscription plans: SME Plan and SOHO Plan. It is regarded as the most influential player and is best suited for large markets.
  • Online payment and banking have changed the way people shop, buy, and pay and how business owners conduct their operations. Indeed, online payment has transformed eCommerce and the banking industry. Malaysia's e-commerce sector is rapidly expanding as more businesses open online stores.
  • The global pandemic has undoubtedly affected consumer behavior and reshaped Malaysia's retail sector. Consumers have become more cautious with their spending habits due to the pandemic-caused financial uncertainty. As a result, many FinTech companies in the country are able to implement buy now, pay later (BNPL) solutions, replacing payment systems with a more flexible, convenient financing option.
  • The COVID-19 pandemic has prompted Malaysia's digital economy to grow and flourish, as have consumers' attitudes toward digital modes of payment. When lockdown restrictions were implemented, customer spending habits shifted to digital means. High-contact physical payments involving cash and signatures are avoided, resulting in changes for both parties involved. Micro, small, and medium-sized businesses, in particular, have begun to recognize the advantages of accepting digital payments.

Scope of the Report

Payments are increasingly becoming cashless, and the industry's role in fostering inclusion has become a top priority. Payments contribute to developing digital economies and drive innovation, all while serving as a stable backbone around the world.

The payments market is divided into two segments: POS and e-commerce. E-commerce payments include online purchases of both goods and services, such as purchases made on e-commerce websites and online travel and hospitality bookings. In terms of POS, all transactions that take place at a physical point of sale are included in the market's scope.

The Malaysian payments market is segmented by mode of payment (point of sale (card payments, digital wallet, cash), online sale (card payments, digital wallet)), and by end-user industries (retail, entertainment, healthcare, hospitality).

By Mode of Payment
Point of Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Cash
Others
Online Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
By End-user Industry
Retail
Entertainment
Healthcare
Hospitality
Other End-user Industries

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Key Market Trends

Increasing internet users

  • Contactless technology adoption, rising smartphone penetration, e-commerce growth, and the emergence of alternative approaches are all projected to increase electronic payments in Malaysia. In Malaysia, bank transfers are the most popular e-commerce payment method. The use of this method is expected to grow at a compound annual growth rate of 25% through 2021.
  • International players entering the Malaysian digital wallets market are increasing year after year. The rising smartphone penetration and digital wallet players capitalizing on Malaysia's relatively underdeveloped market will drive the adoption of this payment option. There are currently 39 businesses in the country with an e-money license, including international players PayPal, Alipay, WeChat, and Google Pay.
  • Malaysia has a high level of cross-border spending, accounting for four out of every ten e-commerce transactions in the country. Malaysian shoppers are willing to purchase from international e-commerce sites, with a percentage already doing so. Global retail giants are pushing to capitalize on Malaysia's opportunities.
Malaysia Payments Market Share

Users of specific mobile wallets in Malaysia

  • E-wallets account for 50 % of all e-commerce transactions in Asia (BCG). For various reasons, Malaysia is seeing an increase in this payment type. For one thing, e-money issuers exceed the number of credit card issuers in Malaysia. Malaysia is the Southeast Asia leader in mobile wallet adoption, with 40% of residents using the technology.
  • Malaysia is considered a rapidly expanding market for mobile payments, as it is catching up to other Southeast Asian countries in terms of mobile commerce. Between 2020 and 2025, the user base of mobile wallets GrabPay and Touch 'n Go is expected to nearly double.
  • Malaysia's payment market The number of purchases made through a digital wallet application by activating an online bank transfer or using a digitally stored credit or debit card is growing. ApplePay, Google Wallet, and Samsung Pay are well-known mobile wallet providers. The payment is made in this case through a contactless interaction of the mobile application with a suitable payment terminal owned by the merchant.
Malaysia Payments Market Growth

Competitive Landscape

iPay88 is a payment gateway pioneer and the best in Malaysia. Scales Samsonite As 50 Grams has aided in providing a wide range of payment methods to cater to various customer groups.

  • May 2022-Razer Merchant Services ("RMS"), Razer Fintech's B2B arm, has partnered with Discover Global Network, Discover Financial Services' global payment brand, as the first acquirer to enable Explore Global Network card acceptance at vendors in Malaysia.
  • March 2021- Paytm announced that its 'Paytm Smart POS' for Android phones may allow merchants to accept near-field communication (NFC)-based debit and credit card payments using smartphones.

Recent Developments

  • May 2022- Nium has expanded its global real-time payments capabilities with the launch of real-time payments in Malaysia. The move brings the Singapore-based payments platform's total real-time payment markets to 100 countries. Over 75% of transactions are now processed globally by the company.
  • May 2022- Mastercard plans to test new technology that will allow customers to pay at checkout with a smile or a wave of their hand. The new biometric checkout technology is intended to eliminate the need for payment by card or mobile device. It will result in shorter lines and faster transactions, which will improve the overall checkout experience.
  • May 2022- Agoda is one of these popular travel search engines, and fortunately for customers, they have partnerships with almost all of Singapore's banks. Agoda's promotions involve credit cards from Citibank, DBS, POSB, HSBC, and UOB. Agoda used to release spontaneous promo codes with brief validity periods – typically 1 to 2 weeks – to keep users on the edge of their seats, checking back for promotions regularly.
  • February 2021- The Malaysian government launched the My Digital and Malaysian Digital Economy Blueprints to assist Malaysia in moving its economy toward digitalization.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Stakeholder Analysis

    3. 4.3 Industry Attractiveness-Porter's Five Force Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Evolution of the payments landscape in the country

    5. 4.5 Key market trends pertaining to the growth of cashless transaction in the country

    6. 4.6 Impact of COVID-19 on the payments market in the country

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Solid e-commerce growth, rising basket spend, and an increasingly digitally savvy population

      2. 5.1.2 Adoption of card-based payments

    2. 5.2 Market Challenges

      1. 5.2.1 Smaller retailers and street vendors face greater challenges in adapting to the new cashless payment ecosystem.

    3. 5.3 Market Opportunities

      1. 5.3.1 Payment services being digitalized

      2. 5.3.2 Expanding e-commerce businesses

    4. 5.4 Key Regulations and Standards in the Digital Payments Industry

    5. 5.5 Analysis of major case studies and use-cases

    6. 5.6 Analysis of key demographic trends and patterns related to payments industry in the country Malaysia (Coverage to include Population, Internet Penetration, Banking Penetration/Unbanking Population, Age & Income etc.)

    7. 5.7 Analysis of the increasing emphasis on customer satisfaction and convergence of global trends in the country Malaysia

    8. 5.8 Analysis of cash displacement and rise of contactless payment modes in the country Malaysia

  6. 6. Market Segmentation

    1. 6.1 By Mode of Payment

      1. 6.1.1 Point of Sale

        1. 6.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.1.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.1.3 Cash

        4. 6.1.1.4 Others

      2. 6.1.2 Online Sale

        1. 6.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.2.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)

    2. 6.2 By End-user Industry

      1. 6.2.1 Retail

      2. 6.2.2 Entertainment

      3. 6.2.3 Healthcare

      4. 6.2.4 Hospitality

      5. 6.2.5 Other End-user Industries

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 Maybank

      2. 7.1.2 PayPal

      3. 7.1.3 Citibank

      4. 7.1.4 IPay88

      5. 7.1.5 CIMB

      6. 7.1.6 Samsung Pay

      7. 7.1.7 Click to Pay

      8. 7.1.8 Bank Islam Malaysia

      9. 7.1.9 Grab Pay

      10. 7.1.10 Huawei Pay

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

**Subject to Availability

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Frequently Asked Questions

The Malaysia Payments Market market is studied from 2022 - 2027.

The Malaysia Payments Market is growing at a CAGR of 11.04% over the next 5 years.

Maybank , PayPal Holdings, Inc., Citigroup Inc. , IPAY88 (M) SDN. BHD. , CIMB are the major companies operating in Malaysia Payments Market.

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