MDEC Tech Trends: Pandemic-Induced Growth of Digital Payments Propel Malaysia into Next Fintech Wave

According to the Visa Consumer Payment Attitudes 2021 study, 7 out of 10 Malaysians have tried to go cashless in 2021.

You’re not alone if you’re holding less cash in your physical wallet than in your digital e-wallets. 

The average number of digital payment transactions per capita has more than quadrupled in the last ten years, increasing from 49 in 2011 to over 221 transactions per capita in 2021, according to Bank Negara Malaysia’s (BNM) most recent data. 

Digital payments use and acceptance in Malaysia has risen significantly over the past decade, but this cashless revolution went mainstream during the COVID-19 pandemic. 

COVID-19’s impact on digital payments

In 2020, at the height of the Movement Control Order (MCO) in Malaysia, the nation saw 3 million new mobile banking service subscriptions. Shifting customer preferences necessitated digital-enabled consumption channels, driving e-wallet usage and adoption to new heights. 

While the world approaches COVID-19 endemicity and a gradual return to normalcy, the Malaysian government has continued encouraging e-wallet adoption via targeted cash handouts.

Earlier this year, the ePemula initiative gave RM150 in e-wallet credit to youths aged 18 to 20 and full-time students, allocating RM300 million under Budget 2022.

Driving Malaysia’s Fintech sector

Malaysia is increasingly moving towards ‘Fintech 4.0’, marked primarily by the emergence of scale in the platformisation of finance. With the increased adoption of e-wallets, e-commerce, BNPL, and other digital financial services, Fintech companies, banks, and payment providers have direct access to customer purchasing behaviours and demographics. 

Indeed, as Malaysia’s population becomes increasingly familiar with the conveniences of e-payment channels and digital financial services, our relationship with finance will continue to shift permanently to “digital first” in the New Normal.