Malaysia Payment Methods Roundup (Updated 2025)

Malaysia's payment ecosystem is characterised by diversity, retaining traditional cash payment habits and actively embracing innovative trends in electronic payments. Below is a professional analysis of the country's leading payment methods:

I. Traditional payment methods

  1. Cash circulation:
  • 2022 Central Bank data shows cash transactions still account for 38% of retail payments
  • Cash utilisation rate of 72% in small transactions (< RM50)
  • Cash dependency is higher in rural areas than in urban 45%

II. Electronic payments matrix

  1. Bank transfer system:
  • FPX (Financial Process Exchange): a real-time transfer channel connecting 37 banks
  • DuitNow: Instant money transfer system launched by the central bank to support mobile phone number/ID number transfers
  • RPP (Recurring Payment Plan) auto-debit service grows significantly

  1. The e-wallet landscape:
    | Platform | Market Share | MAU(Million) | Special Features |
    |————|———-|———–|——————–|
    | Touch 'n Go | 41% | 8.2 | RFID Motorway Bill Payment |
    | GrabPay | 28% | - | Grab Eco-Integration |
    | Boost | - |- |

  2. QR Code Harmonisation Standard:

  • MyQR is launched by PayNet Malaysia.
  • DuitNow QR enables cross-bank code scanning mutual recognition

III. Kaki Payment Network

  1. Debit Card dominates: debit card transactions up 23% year-on-year in 2023
  2. Credit Card Features: Average of 1.7 credit cards per cardholder

IV. Observations on emerging trends
1. BizFast project advances business-to-business digital payments transformation

Malaysia Payment Methods Roundup (cont'd)

IV. Observations on emerging trends (continued)

  1. BizFast project advances business-to-business digital payments transformation

    • Driven by Bank Negara Malaysia (BNM) to optimise B2B payment processes
    • Support for enterprise e-Invoicing, automated reconciliation and real-time billing
    • Expected to cover 80% of medium to large enterprises by 2025

  2. Cross-border payment breakthrough: DuitNow-Thailand QR linkage

    • Interconnection with PromptPay Thailand in 2023 to support mutual recognition of code scanning between Malaysia and Thailand
    • Plans to expand to ASEAN countries such as Singapore and Indonesia in the future

  3. Buy Now Pay Later (BNPL) Market on the Rise
    | Platform | Major Partners | Features
    |————|——————–|————————–|
    | Atome | Zalora, Sephora | 3 Interest-free instalments |
    | Grab PayLater| Merchants in Grab's ecosystem | Based on Grab Credit Score |

  4. CBDC Explore: Project Dunbar Progress

  • BNM partners with Bank for International Settlements (BIS) to test cross-border application of Central Bank Digital Currency (CBDC)
  • Phase2 experiment involves real-time clearing between multiple central banks

V. Analysis of industry pain points

  1. Fragmentation issues::
    -12 major e-wallet operators causing merchants to maintain multiple collection channels
  2. Rural digital divide::
    -Only 67% of adults in Sabah/Sarawak have active e-wallet accounts (national average 82%)
    3.Rising risk of fraud::
    -37% year-on-year increase in financial scams in H1 2023, mainly involving phishing apps and fake investment scams

VI. Regulatory developments

1. Amendment of the Payment Systems Act (PSA):
-Inclusion of large-value payments by non-banking institutions in the prudential regulatory framework
2. New e-KYC regulations.
Allow biometric authentication to replace traditional identification documents for account opening

VII. Future prospects

1.Smart Contract Applications:
Pilot automated settlement of letters of credit in trade finance expected in 2025
2.Wave of Super App Integration:
Platforms like ShopeePay/AirAsia Money may boost market share through M&A

Merchants are advised to adopt the "TNG+FPX+DuitNow QR" combination to reach local consumers in 95%. For cross-border e-commerce players, they should focus on the progress of the Alipay+/DuitNow cross-border channel.