Rise in contactless debit card payments will reduce cash-dependence in Malaysia
The Malaysian payments market remains cash-reliant. However, the concerted efforts by the central bank and other stakeholders are set to gradually push the total number of card payments (including debit, credit and charge cards) from 854.2 million in 2019 to 1.9 billion in 2023, according to Researcher, a leading data and analytics company.
Researcher’s report, ‘Malaysia Cards & Payments: Opportunities and Risks to 2023’, reveals that while credit cards are the most preferred card type for payments, the share of debit cards in total card payments is set to increase from an estimated 25.8% in 2019 to 41.8% in 2023.
Senior Analyst at Researcher, comments: “Although debit cards are traditionally used for cash withdrawals, they are now gradually being used for payments, especially low-value transactions, driven by the rising adoption of contactless debit cards and the expansion of the contactless point-of-sale (POS) network.”
The robust growth in debit card payments is mainly due to the increasing adoption of contactless technology. As part of the Malaysian Chip Card Specification initiative, all debit cards in the country were migrated to contactless by 1 January 2018.
To support this, the number of contactless POS terminals in the country increased by 90.3% in 2018 to reach 207,562. As a result, the number of contactless payments via debit cards rose at an annual rate of 288% from 12.8 million in 2017 to 49.7 million in 2018.
concludes: “The robust growth in contactless cards and infrastructure will support gradual shift of Malaysian consumers from low-value cash transactions to card-based payments, as we have seen in many other markets that have adopted contactless payments.”