The Cards and Payments Industry in Malaysia: Emerging trends and opportunities to 2020
Cash was the predominant payment instrument during the review period, accounting for 93.2% of total volume of payments, especially among the rural population. As the government and banks began to provide basic financial and banking services by expanding banking infrastructure, launching new branches, promoting agent banking networks, and making efforts to change consumer payment habits, payment cards gradually became more accepted, with their use consequently growing during the review period.
Malaysia’s payment card market has recorded strong uptake in contactless technology, with all major banks including Maybank, Bank Simpanan Nasional (BSN), CIMB Bank, Public Bank, and Hong Leong Bank now offering contactless cards. The number of contactless POS terminals stood at 33,721 in 2016, increasing almost sevenfold from 4,839 terminals in 2015. To further encourage contactless payments, banks are launching innovative products. Maybank collaborated with Visa in January 2016 to launch an NFC wristband, Maybank Visa Payband, to enable its customers to make payments with a wave of the wrist.
Debit cards dominate the overall payment card market; these are mostly used for cash withdrawals at ATMs rather than payments at merchant outlets. As of July 1, 2015 BNM has capped interchange fees charged by domestic schemes at 0.15% of the transaction value subject to a maximum interchange fee of $0.11 (MYR0.50) per transaction, while debit cards issued by international schemes are capped at 0.21% of the transaction value subject to a maximum interchange fee of MYR0.50 per transaction.
To improve the payment infrastructure in the country, the central bank plans to have 800,000 point of sale (POS) terminals across Malaysia by 2020. To support this, it set up the Market Development Fund (MDF) in 2015, under which credit card scheme providers can contribute by channeling 0.1% of each payment card transaction.
A growing preference for secure electronic payments, growth in the young population, and deeper smartphone penetration saw banks, payment service providers, and telecom companies launching new solutions to gain market share. Samsung Electronics launched its Samsung Pay mobile wallet in Malaysia in February 2017, while in March 2016 Visa launched Visa Checkout in Malaysia.
The report The Cards and Payments Industry in Malaysia: Emerging trends and opportunities to 2020 provides detailed analysis of market trends in the Malaysian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, payment cards, cash, direct debits, and cheques during the review-period (2012-16e).
In particular, this report provides the following -
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook