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Malaysia Country Report

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  • Published Date: August 2021

A detailed overview of the cards, payments and consumer banking industry in Malaysia, with expert comments supported by accurate data. Despite the rapid increase of digital payment methods, especially contactless (to the detriment of cash but the benefit of debit card and QR code payments), there remain many payments to be migrated to digital, signalling a golden opportunity to enter the Malaysian market.

The possibility is all the more lucrative with Citi's consumer-facing operation on the verge of pulling out, opening up the chance to claim a large slice of the market via the acquisition of that portfolio. At the POS, QR is becoming popular, to the point that it may threaten cards over the next five to ten years; DuitNow, an interoperable QR system, was introduced in 2019.

There are opportunities also in an acquiring market that is currently dominated by local players, suggesting that foreign entrants could bring downward competitive pressure to margins.

What you will learn from this Malaysia payments report

  • The effects of interchange caps imposed in 2015 and 2019.
  • How a vibrant Malaysian mobile payments market is forming fast.
  • Why the credit card market has rebounded from its post-financial crisis trough.
  • What the planned withdrawal of Citibank means.
  • Why e-money continues to grow at world-leading levels.

MALAYSIA CARDS & PAYMENTS REPORT | KEY FACTS

  • Cash usage in Malaysia has fallen due to the effects of the pandemic.
  • Contactless payments have surged as consumers seek more hygienic ways to transact.
  • The importance and popularity of QR code payments increased due to Covid alongside regulatory initiatives.
  • Both credit card outstandings and purchase volume decreased during 2020 as a result of pandemic-related restrictions.
  • A steep decrease in industry-wide pre-tax profitability during 2020 with a further decrease expected in the following year.
  • From 2015 to 2020, debit card purchase volume in Malaysia approximately trebled.
  • The average transaction value on purchase transactions (combining credit and debit) decreased by 16 percent during 2020.
  • The number of point-of-sale terminals increased by 166 percent in the five years to 2020.
  • B2C e-commerce surged during 2020, spurred by restrictions.
  • E-wallets have grown significantly to become a popular online payment method.
  • Maybank is the leading issuing bank by credit cards, outstandings and debit cards.

Malaysia Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Malaysia Payments Data Tables

Appendix I: Demographics and the economy

Demographic and economic indicators
Data table 1: Demographic and economic indicators: 2015-2020. Forecasts to 2024.
Data table 2: Ownership of key consumer devices: 2015-2020. Forecasts to 2024.
Data table 3: Internet usage by population: 2015-2020. Forecasts to 2024.

Appendix II: Payments environment

Data table 4: Access points: 2015-2020. Estimates to 2022.
Data table 5: Account penetration: 2015-2020. Forecasts to 2024.
Data table 6: Consumer payment: trends 2015-2020. Forecasts to 2022.
Data table 7: B2C e-commerce payment methods: 2015-2020. Forecasts to 2022.

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2015-2020. Forecasts to 2024.
Data table 9: Contactless cards metrics: 2015-2020. Forecasts to 2024.
Data table 10: Credit card numbers: 2015-2020. Forecasts to 2024.
Data table 11: Total credit cards metrics: 2015-2020. Forecasts to 2024.
Data table 12: Credit cards profitability indicators: 2015-2020. Forecasts to 2024.
Data table 13: Debit cards numbers: 2015-2020. Forecasts to 2024.
Data table 14: Debit cards metrics: 2015-2020. Forecasts to 2024.
Data table 15: Prepaid/e-money cards metrics: 2015-2020. Forecasts to 2024.

Appendix IV: Mobile payments

Data table 16: Mobile proximity payment metrics: 2017-20. Forecasts to 2024.

Appendix V: Profit pool

Data table 17: Malaysia market profit pool: 2015-20. Forecasts to 2024 including credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix VI: Card networks

Data table 18: Networks' credit card market shares: 2015-20. Forecasts to 2022.
Data table 19: Networks' credit card data numbers: 2015-20. Forecasts to 2022.
Data table 20: Networks' credit card billed volume: 2015-20. Forecasts to 2022.
Data table 21: Networks' number of credit card transactions: 2015-20. Forecasts to 2022.
Data table 22: Networks' average credit card transaction value: 2015-20. Forecasts to 2022.
Data table 23: Credit card interchange fees by network: 2015-20. Estimates for 2021.
Data table 24: Networks' debit card market shares: 2015-2020. Forecasts to 2022.
Data table 25: Networks' debit card data numbers: 2015-2020. Forecasts to 2022.
Data table 26: Networks' debit card billed volume: 2015-2020. Forecasts to 2022.
Data table 27: Networks' number of debit card transactions: 2015-2020. Forecasts to 2022.
Data table 28: Networks' average debit card transaction value: 2015-2020. Forecasts to 2022.
Data table 29: Debit card interchange fees by network: 2015-2020. Forecasts to 2022.
Data table 30: Debit card interchange fees by MyDebit: 2015-2020. Forecasts to 2022.

Appendix VII: Key retail banks and issuers

Data table 31: Key credit card issuers market shares by credit card numbers: 2017-2020. Forecasts to 2022.
Data table 32: Key issuers market shares in credit card outstandings: 2017-2020. Forecasts to 2022.
Data table 33: Key debit card issuers market shares by debit card numbers: 2017-2020. Forecasts to 2022.

Appendix VIII: Acquirers and processing

Data table 34: Merchant acquirer credit card market share: Estimates for 2021.
Data table 35: Credit card merchant service charges: 2015-2020. Forecasts to 2024.
Data table 36: Merchant acquirer debit card market share: Estimates for 2021.
Data table 37: Debit card merchant service charges: 2015-2020. Forecasts to 2024.
Data table 38: Credit card issuer/issuing processor relationships
Data table 39: Credit card acquirer/acquiring processor relationships
Data table 40: Credit card issuing processor market shares by card numbers: Estimates for 2021.
Data table 41: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2021.

Appendix IX: Online acquiring

Data table 42: Online merchant acquirer market share. Estimates for 2021.

Malaysia Country Report | Selected Extracts

Demographics and Economy:
Malaysia is predicted by the World Bank to become a high-income country with a gross national income (GNI) per capita of $12,535 between 2024 and 2028.

Payments Environment:
Malaysia remains a largely cash-based society with cash in circulation equivalent to 8.5% of nominal GDP in 2020. However, the pandemic has accelerated the uptake of digital payment methods that would otherwise have taken several years.

Cards market:
There were 170.2 million payment cards in the country at the end of 2020 (including credit cards, charge cards, debit cards and e-money cards), a 23% increase over the year before.

Mobile Payments:
Malaysia has a vibrant mobile payments market with a wide range of banks and e-money issuers competing. Central bank BNM is actively supporting the development of the market through liberal e-money regulation.

Profit Pool:
As in many other markets, industrywide pre-tax profitability decreased in Malaysia during 2020, in its case by around 19.5%. Credit card purchase volume declined by 12.5%.

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

Key Retail Banks and Issuers:
The Malaysian credit cards market is very competitive, with 27 credit cards issuers serving a population of 33 million, of which only around a fifth hold a credit card.

Acquiring and Processing:
Malaysia's merchant acquiring market is highly competitive, with most issuers offering acquiring services. Processing in this market is mainly carried out in-house. The main acquirers and the majority of the leading issuers are domestic players.

Online Acquiring:
The B2C e-commerce market in Malaysia was worth around $6 billion during 2020, which was almost three times greater than in 2015. Verisk expects B2C e-commerce sales to grow to almost $10 billion by 2022.

Regulatory and Markets Information:
The Malaysian Financial Services Act 2013 (FSA) and Islamic Financial Services Act 2013 (IFSA) together provide a unified legislative framework governing the supervision and conduct of financial institutions in Malaysia.

Malaysia Payments Report | Entities Referenced

99 Speedmart
ACI Worldwide
AirAsia
Alipay
Alliance Bank
AmBank
American Express
Amex
Ant Financial
Apple Pay
ASEAN
Association of Southeast Asian Nations
Atome
Banckard
Bank Islam Malaysia
Bank Negara Malaysia
BigPay
BNM
Boost
Braintree
CIMB Bank
CIMB CNY Go Digital
CIMB Thai Bank
CIMBclick
Citibank
DBKL Parking
Diners Club
Direct Debit System
Discover
DuitNow QR
DuitNow
eGHL
EON Bank
EONCAP Islamic Bank
eSPICK
Etsy
EZ-link
Fave
FavePay
Financial Process Exchange
Focus Point
GHL Systems
Google
Grab
GrabPay
HelloPay
HLB
Hong Leong Bank
Hong Leong Connect
Hoolah
HOUSe
HSBC
HSBC Amanah Malaysia
IBG
ICBC
Industrial and Commercial Bank of China
Interbank GIRO
iPay88
iPay88
Ipmart
JCB
Johan Holdings
JomPay
Lazada
Lazada Wallet
Lelong
Malaysia Digital Economy Corporation
Malaysia Electronic Payment System
Malaysian Electronic Clearing Corporation
Mastercard
Maybank
Maybank2u Pay
Maybank2u
MaybankPay
MBF Cards
MDEC
MEPS
MIMB Investment Bank
MyClear
MyDebit
National Electronic Cheque Information Clearing System
NESR
NESR 2.0
NTT DATA
OCBC
Payments Network Malaysia
PayNet
PayPal
Paysys Malaysia
PG Mall
Pine Labs
Pine Payment Solutions
PromptPay
Public Bank
Qoo10
Rakuten
Razer
Razer Merchant Services
Razer Pay
Real-Time Retail Payments Platform
Retail Payments Platform
RHB
RHB Bank
RPP
Sadaqa House
Samsung Pay
SAN
Sarawak Pay
Shared ATM Network
Shopee
ShopeePay
Shopmatic
Singtel
SnapNPay
Standard Chartered
SuperBuy
Tap2Phone
Telekom Malaysia
Temasek
Tencent
TnG
Touch 'n Go
TouchnGo
UnionPay
United Overseas Bank
Universiti Malaysia Terengganu
UOB
Visa
WeChat Pay
World Trade Platform
WWF Malaysia
YouTrip
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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