Malaysia joined the credit card revolution in the mid-1970s, but today we are seeing a new chapter in cashless transactions due to the boom in digital technologies. A major milestone was achieved when Maybank2u burst into the scene in June 2000, becoming the first one-stop online financial portal in Malaysia.
Today, the country’s e-commerce market, including cashless and mobile payment ecosystems, is valued at over USD$4 billion (RM16.69 billion). Annual sales have expanded significantly since 2015, jumping 47.8 percent in 2017 alone.
Within this segment, the digital wallet is expected to experience the fastest growth from 2019 to 2021, with uptake increasing at a compound annual growth rate of 53 percent, according to projections by JP Morgan. PricewaterhouseCoopers is similarly optimistic, and expects Malaysia’s e-wallet market to be worth US$20 billion (RM83.8 billion) by 2024.
Experts attribute this phenomenal growth to the country’s high internet and mobile penetration rates. Add to this the introduction of a wide range of mobile wallets into the market, offering not just the convenience and security of payment, but also extensive perks and benefits. This bodes well for digitally savvy consumers who are always on the lookout for convenience and cost savings.
Fiona Jitab, a senior digital and analytics manager, is a typical user. She accesses a plethora of mobile wallets for a wide range of transactions daily thanks to the different rewards she obtains.
“I hardly ever carry much cash anymore as I tend to use mobile wallets for everything from food and commute, to bills and even unexpected purchases,” the Miri-born Fiona said.
“It’s easier to track all my expenses this way. Plus, I save more money with the cashbacks and points redemption on my next purchase,” she concluded.
While the electronic and digital payment ecosystem in Malaysia is still nascent, both public and private sector players are pushing to expand into untapped markets and accelerate full migration to e-payment.
Bank Negara Malaysia (BNM), through its Financial Sector Blueprint 2011-2020 (FSBP), is working with industry players to improve and widen access to e-payment infrastructure, as well as identify and remove barriers to greater adoption. This includes rolling out the Interoperable Credit Transfer Framework (ICTF) that establishes a shared payment infrastructure connecting bank and non-bank accounts, as well as the Real-time Retail Payments Platform (RPP) to enable seamless and secure payments through simple identifiers, such as mobile phone, IC, and business registration number.