Terry KS Visa’s latest whitepaper reveals that Malaysia’s MSMEs, crucial to the nation’s economy, are increasingly embracing digitalisation. Key drivers for growth include boosting productivity, strengthening cybersecurity, improving cash flow management, and discovering new revenue streams.
MALAYSIA, 2 DECEMBER 2025 – Visa Malaysia, a global leader in digital payments, today unveiled insights from its latest whitepaper, From Transaction to Transformation: Unlocking Malaysian MSMEs Potential. The study outlines four critical pathways that micro, small, and medium-sized enterprises (MSMEs) can take to accelerate growth through digitalisation, namely boosting productivity, strengthening cybersecurity, improving cash flow and capital management, and finding new revenue streams.
MSMEs are a driving force behind Malaysia’s economy, representing 97% of registered businesses, contributing 38% of the GDP, and employing nearly half of the workforce (48%). As Malaysia strives to become a high-income, technology-driven nation by 2030, MSMEs are poised to play a key role in the country’s digital transformation. National strategies such as the Malaysia Digital Economy Blueprint and the national 4IR Policy have set the stage for widespread digital adoption, with over 80% of MSMEs already taking steps to digitalise their operations across various functions like finance, accounting, marketing, and sales.
Previn Pillay, Country Manager for Visa Malaysia, highlighted the importance of MSMEs in the nation’s economic resilience and trade flows in ASEAN. He pointed out that in 2021, Malaysian street stalls and kiosks generated US$1.8 billion in retail sales, with projections showing a rise to US$2.8 billion by 2026, underscoring that digitalisation is now a vital component for business growth.
1. Boosting Productivity
Digital tools are becoming essential for Malaysian MSMEs to enhance operational efficiency and foster growth. According to Visa’s MSME survey, 45% of businesses cited productivity as their primary motivation for going digital. However, there is still significant room for improvement, as only 46% of MSMEs are using digital solutions for finance and accounting. The adoption of digital payments is already proving beneficial, with 98% of street vendors reporting reduced hassle during peak hours, and 95% stating it allows faster sales and instant payments. Visa’s solution, Visa Commercial Pay, empowers businesses to streamline operations, automate reconciliation, and manage virtual card issuance, offering real-time financial data in a secure environment.
2. Strengthening Cybersecurity
As MSMEs embrace digital platforms, the risk of cyber threats has become a growing concern. More than half of Malaysian MSMEs rank cybersecurity and data privacy as top concerns. In the first half of 2024 alone, Malaysia recorded 19.62 million cyberattacks. Despite this, many MSMEs lack the resources to build robust cybersecurity infrastructures. Visa is helping businesses protect transactions through secure solutions like Visa Token Service and Cybersource, which use tokenisation and advanced fraud detection to build a safer financial ecosystem.
3. Improving Cash Flow and Capital Management
Financial management remains a persistent challenge for MSMEs. With 31% of MSMEs highlighting working capital management as a major issue, many owners use personal debit or credit cards for business expenses, which leads to blurred financial visibility. Visa’s suite of solutions, including Visa Commercial Pay and virtual cards, helps separate personal and business finances, automating reconciliation and offering clearer insights into financial health. This can be particularly valuable as Malaysia prepares for the upcoming e-invoicing mandate in 2026, providing MSMEs with the tools to improve access to financing and bridge the US$21.5 billion funding gap.
4. Finding New Revenue Streams
Digitalisation offers MSMEs more than just efficiency; it also presents opportunities for growth. The study found that 32% of MSMEs believe digitalisation helps them develop new income sources, while 29% say it allows them to reach new customer segments. Street vendors, often overlooked in digital transformation narratives, are already embracing digital tools. About 64% of them have digitalised their sales, and 57% have moved marketing online. However, 54% still rely on cash payments due to challenges like knowledge gaps and high adoption costs. Visa Accept is addressing these challenges by enabling merchants to accept digital payments directly via their smartphones, reducing the need for expensive point-of-sale terminals.
Visa’s whitepaper shows that Malaysian MSMEs are at a pivotal point in their digital journey. As businesses adopt digital tools, they unlock new efficiencies, expand their market reach, and contribute to Malaysia’s transition towards a digital economy. With the right support from industry players, government initiatives, and technology providers, MSMEs are well-positioned to thrive in an increasingly connected and cashless world.