Malaysians Projected to Spend RM387 Billion via Cards in 2024, Nudging Towards Cashless Future

Malaysians are expected to spend RM387 billion via credit and debit cards in 2024, signifying a shift towards a cashless society. This projection reflects a growing trend in electronic payments, driven by factors such as expanding banking population, evolving POS infrastructure, and government initiatives promoting cashless transactions.

2 April 2024 – As Malaysia edges closer to a cashless society, data and analytics firm GlobalData predicts that Malaysians will collectively spend approximately RM387 billion this year using credit and debit cards. With debit card transactions estimated at RM156.4 billion and credit card usage at RM230.5 billion, the country is witnessing a gradual shift towards digital payment infrastructure, fueled by an expanding banking population and an evolving point-of-sale (POS) landscape.

Poornima Chinta, Senior Banking and Payments Analyst at GlobalData, highlighted that despite the prevailing presence of cash in Malaysia, electronic payments are gaining momentum, a trend that has been accelerated by the Covid-19 pandemic. The study revealed a robust compound annual growth rate of 14.3% in card payment value between 2019 and 2023, reaching RM351.2 billion last year.

Projections indicate a continuous upward trajectory in card spending among Malaysians, with estimates soaring to RM533.1 billion by 2028. This growth is underpinned by enhancements in POS infrastructure and government initiatives aimed at promoting cashless payments, including campaigns advocating for digital alternatives in governmental transactions.

Bank Negara’s initiative to reduce interchange fees, effective from January 1 last year, has further propelled card acceptance among merchants. Notably, the surge in contactless payments has contributed to the rise in card transactions, with Bank Negara reporting that 68.9% of physical premises transactions were contactless in 2022, compared to 64.6% in the previous year.

Despite traditionally being favored for cash withdrawals, debit cards are increasingly being utilized for payments, particularly for low-to-medium value transactions. This shift is attributed to heightened consumer awareness, the introduction of contactless debit cards by banks, and the expansion of the country’s POS network.

Chinta emphasized that Malaysia’s payment card market is poised for sustained growth, with a projected compound annual growth rate of 8.3% between 2024 and 2028, reflecting the country’s ongoing transition towards a cashless economy. – ref: The Star

Author: Terry KS

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