Cashless society in Malaysia within 3 years

This is driven by the widespread use of mobile wallets (52%), contactless card payments (44%), and rising interest in the use of new methods such as BNPL solutions (63%)

by AZREEN HANI / pic by BLOOMBERG

UP TO 74% of Malaysian consumers have succeeded in going cashless, and it will take only three years for the country to become a cashless society, according to the 2022 Visa South-East Asia (SE Asia) Consumer Payments Attitudes Study.

Seventy-five percent increased use of contactless payments was reported, while up to 60% rise in card usage was recorded during the pandemic.

The study also said that preference for cashless payments continues to grow in SE Asia with nearly four in five (77%) SE Asian consumers plan to use cashless payments more often.

This is driven by the widespread use of mobile wallets (52%) and contactless card payments (44%), as well as rising interest in the use of new methods such as Buy Now Pay Later (BNPL) solutions (63%).

Across SE Asia, 93% of consumers use a multitude of cashless payment methods including cards, contactless cards and mobile contactless, mobile wallets and QR code payments.

This is led by consumers in Singapore (97%), Malaysia (96%), Indonesia (95%) and Vietnam (95%).

An increasing number of consumers are opting for cashless payments in markets where cash remains dominant, such as Cambodia, the Philippines and Vietnam.

“With e-commerce and omnichannel retail becoming more prevalent, consumers expect shopping touchpoints to be embedded in our everyday lives.

“This has led to the rise of social media and live stream shopping as our world gradually becomes a marketplace,” Visa Group regional SE Asia country manager Serena Gay said in the study.

“As shopping channels and consumer purchases evolve to become increasingly digital — from downloadable shoes and non-fungible tokens (NFTs) to digital-only goods in the metaverse — businesses need to keep pace and adapt. Now more than ever is the time for businesses to re-examine operations and processes to go fully digital,” she added.

The pandemic has further accelerated the growth of home delivery across the region, with 88% of SE Asian consumers now using home delivery, compared to 83% in 2020.

Almost three in four consumers use online payment before delivery (73%), making it the top preferred payment method for deliveries in SE Asia.

This trend is led by Malaysia (84%), Indonesia (83%) and Singapore (76%).

There is an opportunity for growth in markets — such as the Philippines (63%) and Cambodia (43%) — where cash-on-delivery remains the default payment method for home deliveries.

The study further stated that digital banks are well-positioned for growth in SE Asia, where there is generally high awareness and interest from consumers.

“However, many consumers still prefer to hold their main banking accounts with traditional banks (60%) rather than with digital banks,” the study said.

Despite this, digital banks are preferred in the areas of offering 24-hour banking (35%), lower overall costs (32%) and convenience (30%).

Traditional banks, on the other hand, are preferred for safety (27%), reliability (25%) and positive customer experiences (24%). Consumer receptiveness towards digital banks is significantly higher in Indonesia (49%) and the Philippines (45%) compared to other markets.