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The Cards and Payments Industry in Malaysia: Emerging trends and opportunities to 2020

  • July 2017
  • 62 pages
  • GlobalData
Report ID: 3382284

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The Cards and Payments Industry in Malaysia: Emerging trends and opportunities to 2020

Summary
Cash was the predominant payment instrument during the review period, accounting for 93.2% of total volume of payments, especially among the rural population. As the government and banks began to provide basic financial and banking services by expanding banking infrastructure, launching new branches, promoting agent banking networks, and making efforts to change consumer payment habits, payment cards gradually became more accepted, with their use consequently growing during the review period.

Malaysia’s payment card market has recorded strong uptake in contactless technology, with all major banks including Maybank, Bank Simpanan Nasional (BSN), CIMB Bank, Public Bank, and Hong Leong Bank now offering contactless cards. The number of contactless POS terminals stood at 33,721 in 2016, increasing almost sevenfold from 4,839 terminals in 2015. To further encourage contactless payments, banks are launching innovative products. Maybank collaborated with Visa in January 2016 to launch an NFC wristband, Maybank Visa Payband, to enable its customers to make payments with a wave of the wrist.

Debit cards dominate the overall payment card market; these are mostly used for cash withdrawals at ATMs rather than payments at merchant outlets. As of July 1, 2015 BNM has capped interchange fees charged by domestic schemes at 0.15% of the transaction value subject to a maximum interchange fee of $0.11 (MYR0.50) per transaction, while debit cards issued by international schemes are capped at 0.21% of the transaction value subject to a maximum interchange fee of MYR0.50 per transaction.

To improve the payment infrastructure in the country, the central bank plans to have 800,000 point of sale (POS) terminals across Malaysia by 2020. To support this, it set up the Market Development Fund (MDF) in 2015, under which credit card scheme providers can contribute by channeling 0.1% of each payment card transaction.
A growing preference for secure electronic payments, growth in the young population, and deeper smartphone penetration saw banks, payment service providers, and telecom companies launching new solutions to gain market share. Samsung Electronics launched its Samsung Pay mobile wallet in Malaysia in February 2017, while in March 2016 Visa launched Visa Checkout in Malaysia.

The report "The Cards and Payments Industry in Malaysia: Emerging trends and opportunities to 2020" provides detailed analysis of market trends in the Malaysian cards and payments industry. It provides values and volumes for a number of key performance indicators in the industry, including credit transfers, payment cards, cash, direct debits, and cheques during the review-period (2012-16e).

In particular, this report provides the following -
- Current and forecast values for each market in the Malaysian cards and payments industry, including debit, credit and charge cards.
- Detailed insights into payment instruments including credit transfers, cash, cheques, direct debit, and payment cards. It also, includes an overview of the country’s key alternative payment instruments.
- E-commerce market analysis and payment methods.
- Analysis of various market drivers and regulations governing the Malaysian cards and payments industry.
- Detailed analysis of strategies adopted by banks and other institutions to market debit, credit and charge cards.

Companies mentioned in this report: Maybank, Bank Simpanan Nasional, CIMB Bank, Hong Leong Bank, Public Bank, Citibank, HSBC, Bankcard, AmBank, Global Payments, Visa, Mastercard, American Express.

Scope
- Malaysia’s payment card market has recorded strong uptake in contactless technology, with all major banks including Maybank, Bank Simpanan Nasional (BSN), CIMB Bank, Public Bank, and Hong Leong Bank now offering contactless cards. The number of contactless POS terminals stood at 33,721 in 2016, increasing almost sevenfold from 4,839 terminals in 2015. To further encourage contactless payments, banks are launching innovative products. Maybank collaborated with Visa in January 2016 to launch an NFC wristband, Maybank Visa Payband, to enable its customers to make payments with a wave of the wrist.
- A growing preference for secure electronic payments, growth in the young population, and deeper smartphone penetration saw banks, payment service providers, and telecom companies launching new payment solutions to gain market share. Samsung Electronics, CIMB Bank, and Maybank all launched mobile wallets between 2016 and 2017.
- BNM launched the Malaysian Chip Card Specification initiative in 2014 as part of a shift towards EMV standards. According to BNM, complete migration to EMV standards with contactless functionality is expected to be completed by January 1, 2018. As a result, from 2015 banks gradually started to replace domestic debit cards with EMV-compliant cards with contactless functionality.

Reasons to buy
- Make strategic business decisions, using top-level historic and forecast market data, related to the Malaysian cards and payments industry and each market within it.
- Understand the key market trends and growth opportunities in the Malaysian cards and payments industry.
- Assess the competitive dynamics in the Malaysian cards and payments industry.
- Gain insights into marketing strategies used for various card types in Malaysia.
- Gain insights into key regulations governing the Malaysian cards and payments industry.

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ref:plp2017

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