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Blog - Published on July 19, 2021

Welcome to Malaysia, where cash isn’t necessarily king

Malaysia is the 38th largest market for eCommerce, globally. With a revenue of $4 billion USD in 2020, and GDP growth that is both high and consistent, it is quickly becoming a key eCommerce market for businesses looking to expand into the Asia-Pacific region.

The Local Payment Culture

Understanding the preferred local payment methods of the market you are considering moving into is key to successful expansion – and Malaysia is no exception. The preferred payment methods of the Malaysian online payment market can be split into 5 categories: Bank transfers (48%), cards (30%), cash (5%), digital wallets (10%), and others (7%).

Online Bank Transfers:

Bank penetration within Malaysia sits at 85% - so it’s no surprise that online bank transfers are the preferred method of payment. The market is dominated by players such as Maybank2u, CIMB Clicks and AMBank Group to name just a few.

Global players like JP Morgan don’t predict any sizeable shifts here. In fact, by 2023, they believe that nearly half of all online purchase will still be made by online bank transfer. So, for merchants looking to expand into the region, accepting this method of payment is going to be key.

Card Payments:

Card payments are also a popular online payment method in this region, representing 30% of the split. This has largely been driven by improvements in banking infrastructure and technology, with usage expected to grow to 39% by 2023.


Another frequently used means of paying for online services, is cash-based payment methods. This service is predominantly facilitated though convenience stores that support digital payments for bill payments such as 7-eleven and 99 Speedmart, or through cash-on-delivery systems.

Digital Wallets:

The one to watch. Digital wallets have had a meteoric rise in popularity in the country over the last five years. This has been driven by digital wallet providers capitalizing on the increased smartphone penetration of the region and government incentives such as eBelia. Like many countries in the region, the space is dominated by subsidiaries of large corporations who have added a wallet brand to capitalise on their existing client base. Major players include Boost (Axiata Group) and BigPay (AirAsia Group).

Recently, the regulator issued a conditional approval to what might be the countries first standalone start-up in the country; MyMy. Founded by Kishore Samuel and Joe McGuire, the fintech has ambitions to become the regions premier digital bank and the countries first unicorn. We contacted Joe McGuire to ask about the company’s plans since receiving their license. “The ASEAN region represents the largest population of people globally without access to financial services. Today that number stands at roughly 390 million people who own a phone but have never had their own bank account. Like NuBank did in Brazil, we are hoping to bridge the gap of financial inclusion through our in-house built digital financial services.”

A special mention: Digital Banking

In late 2020, Bank Negara Malaysia (BNM) revealed its digital banking guidelines. Within this new guideline it stipulates that the central bank will be issuing up to 5 digital bank licenses in 2022 ‘in order to allow innovative players to come into the fray while simultaneously protecting the financial stability’

It is anticipated that ‘this new generation of banks will challenge the status quo by introducing new ways of delivering financial products, simplifying banking products and services, as well as making finance more approachable to customers overall. This could potentially translate to increased financial inclusion within Malaysia’. For merchants considering expanding into the region, this is one to keep an eye on.

A Digital Generation

Malaysia has a high internet penetration rate, sitting at 80% compared to the average for the region (69%), and a smartphone penetration of over 84%, compared to an average of 57% for the region. This has been achieved by the governments drive to make ecommerce accessible to all. When combined with the fact that the population is relatively young, with an average age of 28 years old, Malaysia is home to a large generation of tech-savvy prospective customers.

Mobile commerce alone is valued at close to $2billion. And close to 45% of smartphone users use their device to shop online, so for any business expanding into this region, it is imperative that your solution is optimized for mobile – both in terms of user experience and digital wallets.

Opportunity for eCommerce

Like many emerging markets, expanding into the Malaysian market can be tricky and local payment method knowledge is essential. By leveraging Yapstone’s payment expertise and services such as local entities, regulatory approvals, and smart FX, Yapstone removes the complexities for merchants looking to do business in Malaysia. Find out how Yapstone can help you optimize growth in this key market by downloading our Malaysia Country Guide.

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