Online payment methods in Malaysia: an emerging market poised for growth.
Malaysia is a hot destination for businesses looking to expand to emerging markets. Malaysia is seeing GDP growth that is both high and relatively consistent when compared with other Southeast Asian nations.
With the Malaysian government pushing for economic and technological development, there are many reasons to be excited about the potential of this ecommerce hotbed.1
- Malaysia is home to 31.6 million residents2
- 63.9% smartphone penetration and 80% internet penetration2
- Mobile commerce is $1.9 billion while ecommerce is valued at $4 billion2
Download the Asia Pacific eCommerce and Payments Guide
Rapyd research reveals consumers’ most frequently used and preferred payment methods across the Asia-Pacific region (APAC).
Expanding your business to the Malaysian market requires knowledge of local payment methods. There are 4 major payment categories in Malaysia that are important to understand. While cash remains popular, bank transfers are quickly becoming the dominant payment method, and cards and ewallets can’t be overlooked.
Bank transfers are the driver of the Malaysian ecommerce economy, representing 44% of transactions in 2019 and projected to remain stable over the next few years.3 This is true for both B2C ecommerce as well as B2B payments in Malaysia.
Transfers are dominated by Maybank2u. There are a number of reasons why bank transfers are expected to continue to be a popular Malaysian payment method. Bank penetration within Malaysia is 85% and many domestic banks have launched their own branded transfer options, such as CIMB Clicks.3
Cards are the second most popular online payment method in Malaysia. Representing 36% of the online market in 2019, credit card usage is expected to grow to 39% by 2023.3
The growth of credit card use is supported by many factors including aggressive marketing campaigns with incentives, improved banking infrastructure and increased point-of-sale card acceptance. Malaysians now favor credit cards over debit cards by 4-to-1 showing that they prefer to extend their credit lines for purchases.4
Malaysians now favor credit cards over debit cards by 4-to-1
Cash remains a frequently used payment method in Malaysia. In fact, cash is used in 7% of digital transactions.2 Cash has remained relatively popular and while projected to decrease in use, is expected to do so slowly. It is expected that Malaysia will be a largely cashless society in twenty years.5
About 50% of all ecommerce transactions in Asia are conducted through ewallets.6 Malaysia is seeing a trend towards this type of payment for a variety of reasons. For one, there are more e-money issuers in Malaysia than credit card issuers. In Southeast Asia, Malaysia is a leader in mobile wallet adoption, with 40% of residents utilizing the technology.7 Boost (9.8%), Touch N Go (7.0%), Grabpay (3.6%) and PayPal (1.6%) are all preferred vendors of increasing importance with Boost accepted in over 140,000 locations.8
The varied preferences of consumers in Malaysia means merchants need an all-inclusive payments strategy that includes popular bank transfers, local cards, ewallets and cash acceptance for digital transactions.
Looking to Grow Online Sales? Add Rapyd’s All-in-One Payment Solution for Malaysia.