Malaysia has traditionally been a cash-dominant society. However, the COVID-19 pandemic has accelerated Malaysia's push towards electronic payments, with card payments at point of sale (POS) terminals continuing to rise, according to GlobalData, a leading data and analytics company.
According to GlobalData estimates, card payments in Malaysia will grow by 4.3% to reach MYR214.4bn (US$52.4bn) while ATM cash withdrawals will increase marginally by 1.3% in 2020, another step closer to realizing the Society 5.0 vision.
Ravi Sharma, Banking and Payments Lead Analyst at GlobalData, comments: “Malaysians are increasingly using digital channels for making payments with cash taking a back seat. While card payments are on the rise, the growth rate will be impacted due to the decline in consumer spending following COVID-19 pandemic.”
As wary consumers stay at home, they are expected to use online channels to purchase goods. The rise in e-commerce transactions will further support card payments as credit and debit cards account for 36.8% in the total e-commerce value in Malaysia, according to the latest 2020 Banking & Payments Survey*.
Even while shopping in-stores, consumers are gradually shifting away from cash to digital payment tools to avoid exposure to potential disease vectors such as cash and POS terminals.