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Malaysia Country Report

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  • Published Date: October 2019

A comprehensive overview of the cards, payments and consumer banking market in Malaysia.

What you will learn from Malaysia payments research report

  • How the Payment Card Reform Framework has affected the Malaysian market
  • What role is played by Premium cards
  • How Islamic financing is faring as the government pushes Sharia lending
  • The key relationship that is influencing market shares for global schemes
  • How alternative forms of Malaysia digital payment are progressing

MALAYSIA CARDS & PAYMENTS REPORT | KEY FACTS

  • Malaysia has a competitive banking and payments market. One of the most notable trends is the rise of Islamic Banking, with almost 40 per cent of bank lending now Sharia-compliant.
  • Maybank is the dominant retail bank in Malaysia and is the leading issuer and acquirer of payments cards.
  • The central bank has made several interventions to promote electronic payments, most notably the Payment Card Reform Framework (PCRF) of 2015.
  • The PCRF imposed caps on interchange fees and introduced other measures designed to reduced costs and simplify card acceptance for merchants.
  • The Malaysian debit card scheme, MyDebit, has been a beneficiary of the new rules, chiefly because merchants are now free to choose their preferred network on transactions with dual-branded cards.
  • Credit cards account for the bulk of purchase volume on cards in Malaysia; debit cards are used primarily for cash withdrawal.
  • E-money issuers play an increasingly important role in Malaysia's payments ecosystem. There are 42 non-bank operators and five banks licensed to issue e-money.
  • Among these are local players such as Touch 'n Go, best known for transport-related cards. Several global players – including Alipay, WeChat Pay, Google and PayPal – also hold e-money licences.
  • The average adult made 78 e-money payment transactions in 2018, almost treble the number made on Malaysian credit and debit cards combined. The average transaction value is just $1.38, with usage heavily weighted towards transit.
  • Mobile payments are growing rapidly in terms of users and acceptance points. A common QR code standard is in development which should accelerate adoption in a fragmented market.

Malaysia Payments Research | Report Contents

Key Topics
Demographics and the economy
Payments environment
Malaysia cards market
Mobile payments
Profit pool
The networks in Malaysia
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information
Appendices: Data

Appendix I: Demographics and the economy

  • Demographic and economic indicators
  • Ownership of key consumer devices
  • Internet usage by population

Appendix II: Payments environment

  • Access points
  • Account penetration
  • Consumer payment trends
  • B2C e-commerce payment methods

Appendix III: Cards market

  • Total cards payment metrics
  • Contactless cards metrics
  • Credit card numbers
  • Total credit cards metrics
  • Credit cards profitability indicators
  • Debit cards numbers
  • Debit cards metrics
  • Prepaid/e-money cards metrics

Appendix IV: Mobile payments

  • Mobile proximity payment metrics

Appendix V: Profit pool

  • Profit pool

Appendix VI: The networks

  • Networks' credit card market shares
  • Networks' credit card numbers
  • Networks' credit card billed volume
  • Networks' number of credit card transactions
  • Networks' average credit card transaction value
  • Credit card interchange fees by network
  • Networks' debit card market shares
  • Networks' debit card numbers
  • Networks' debit card billed volume
  • Networks' number of debit card transactions
  • Networks' average debit card transaction value
  • Debit card interchange fees by network

Appendix VII: Key retail banks and issuers

  • Key credit card issuers market shares by credit card numbers
  • Key issuers market shares in credit card outstandings
  • Key debit card issuers market shares by debit card numbers

Appendix VIII: Acquirers and processing

  • Merchant acquirer credit card market share
  • Credit card merchant service charges
  • Merchant acquirer debit card market share
  • Debit card merchant service charges
  • Credit card issuer/issuing processor relationships
  • Credit card acquirer/acquiring processor relationships
  • Credit card issuing processor market shares by card numbers
  • Credit card acquiring processor market shares by the number of POS transactions

Appendix IX: Online acquiring

  • Online merchant acquirer market share

Malaysia Country Report | Selected Extracts

Demographics and Economy:
It is expected that Malaysia's main economic sectors will record positive growth, with healthy growth in the service and manufacturing sectors in particular. These two sectors are the largest contributors to the economy, accounting for approximately 79% of GDP, according to the government.

Payments Environment:
Malaysia remains a largely cash-based society with cash in circulation equivalent to two-thirds of GDP in 2018. Cash is often used for payments at small businesses, including traditional wet markets and hawker centres (open-air food courts). Nevertheless, the use of non-cash retail payments continues to grow.

Cards market:
There were 113.9 million payment cards in the country at the end of 2018 (including credit cards, charge cards, debit cards and e-money cards), a 15% increase over the year before. Malaysia has one of the world's highest cards penetration rates, predominantly because over half are e-money cards.

Mobile Payments:
The country has a vibrant mobile payments market with a wide range of banks and e-money issuers competing. BNM is actively supporting further development through liberal e-money regulation and the integration of its own e-wallet, MEPS-CASH, into MyDebit, the national debit card, which is distributed by all domestic banks

Profit Pool:
Profitability of Malaysia's credit cards market has followed an upward trend, thanks largely to growth in card numbers. As is the case in many markets globally, issuer portfolios in Malaysia have gradually shifted towards less risky transactors in the last decade.

Card Networks:
Malaysia has a competitive credit cards market, with all the major international brands present: Visa, Mastercard and American Express. There are three debit card networks operating in Malaysia: Visa, Mastercard and domestic network MyDebit. The majority of Visa- and Mastercard- branded cards are co-badged with MyDebit.

Key Retail Banks and Issuers:
The credit cards market is very competitive with about 26 credit cards issuers serving a population of 32 million, of which only a minority are eligible for a credit card. The largest four credit cards issuers – Maybank, CIMB Bank, Citibank and Hong Leong Bank – collectively had a market share of 59% in 2018.

Acquiring and Processing:
Malaysia's merchant acquiring market is highly competitive, with most issuers offering acquiring services. The three largest merchant acquirers – Maybank, AmBank and CIMB – collectively accounted for an estimated 72% market share in 2018 in terms of acquired transactions.

Online Acquiring:
The e-commerce market had estimated revenue of $3.4 billion in 2018 and is expected to experience healthy double-digit growth through the forecast period.

Regulatory and Markets Information:
The government is focusing on the interoperability of networks to expand digital payments. There are two types of payment systems in place – the large-value payment system (SIPS) and the retail payment system.

Malayia Payments Trends | Entities Referenced

7-eleven
99 speedmart
ACI Worldwide
AirAsia
Alipay
Alliance Bank
AmBank
American Express
Ant Financial Services
Apple Pay
ASEAN
Association of Southeast Asian Nations
Bank Islam Malaysia
Bank Negara Malaysia
Bank of Chengdu
Bank of China
Bankard
Bayar
BigPay
BNM
Boost
Braintree
CIMB
CIMB Pay
Citi
Citibank
Cognizant
DBKL Parking
Digi Telecommunications
Diners Club
Direct Debit
DuitNow
eGHL
Emirates
EON Bank
EONCAP Islamic Bank
eSPICK
Etsy
EZ-link
FavePay
Financial Process Exchange
GHL Cardpay
Google
Grab
GrabPay
helloPay
HLB
Hong Leong Bank
HOUSe
HSBC
HSBC Amanah Malaysia
HSBC Bank Malaysia
IBG
IBM
ICBC
ICTF
Industrial and Commercial Bank of China
Interbank GIRO
Interoperable Credit Transfer Framework
iPay88
Ipmart
Jack Ma
JCB
JomPay
KiplePay
Lazada
Lelong
Loan2Go
Malaysia Airlines
Malaysia Electronic Payment System
Malaysian Digital Economy Corporation
Malaysian Electronic Clearing Corporation
ManagePay Systems
Mastercard
Maybank
MaybankPay
McDonald's
mCompass
MDEC
MEPS
MEPS-CASH
MIMB Investment Bank
MOLPay
MPay
MyClear
MyDebit
MyRapid Touch 'n Go
National Electronic Cheque Information Clearing System
NETS
NTT DATA
OCBC
OctoPay
ONEXOX
Pacific Malaysia
Payment Card Reform Framework
Payments Network Malaysia
PayNet
PayPal
Paysys Malaysia
PCRF
Petronas
PETRONAS Dagangan
PICKnGO
Public Bank
Qoo10
Rakuten
Razer
RazerPay
Real-Time Retail Payments Platform
Reflex
Retail Payments Platform
RHB Bank
RRP
Sadaqa House
Samsung Pay
SAN
Sarawak Pay
Shared ATM Network
Shell
SmartTAG
SnapNPay
Standard Chartered
SuperBuy
TAP Mobile Banking-I
Telekom Malaysia
Tencent
Tesco Malaysia
The Store
TnG
TnG Digital
Touch 'n Go
Touch 'n Go
Tun Razak Exchange
UnionPay
UOB
Vcash
Visa
WeChat Pay
Western Union
World Trade Platform
WorldRemit
XOX Mobile
Zalora

MORE ASIA-PACIFIC CARDS & PAYMENTS REPORTS

Verisk financial reports include detailed market and competitor intelligence on payments cards, e-money, acquiring, retail banking, and consumer credit in the Asia Pacific region. Analysts use primary and secondary source data and conduct in-depth interviews with senior industry executives and finance experts.

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