Card payment market seen growing 8.5% this year


According to GlobalData’s Payment Cards Analytics, the value of card payments in Malaysia fell 4.9% in 2020, dragged by lockdown and social distancing restrictions, which led to reduced consumer spending and closing of brick-and-mortar shops that affected card payments.

KUALA LUMPUR: Malaysia’s card payment market is set to rebound this year with a growth of 8.5%, given the improving economic conditions and with the vaccination programme gathering pace.

According to GlobalData’s Payment Cards Analytics, the value of card payments in Malaysia fell 4.9% in 2020, dragged by lockdown and social distancing restrictions, which led to reduced consumer spending and closing of brick-and-mortar shops that affected card payments.

GlobalData estimates the value of card payments to grow at a compounded annual growth rate of 11.1% through 2025.

By 2025, the data and analytics company forecasts that card payments in Malaysia would reach RM322.7bil with the gradual rise in consumer spending.

Meanwhile, GlobalData lead banking and payments analyst Ravi Sharma said the country has made significant progress in the adoption of card payments in the past few years, driven by increasing banked population, rising consumer awareness of electronic payments and greater merchant acceptance.

“Credit and charge cards are the most preferred card type for payments in Malaysia primarily due to the reward benefits offered on these cards.

“They account for 66.5% of all card payments by value in 2021 while debit cards account for the remaining 33.5% share.

“While the market was affected due to the Covid-19 pandemic in 2020, it is expected to rebound as consumers shift from cash to non-cash payments to avoid getting infected,” he added.

Although there was a decline in overall card payments, Sharma said debit card registered a growth of 13.6% last year.

This is mainly due to the migration of cash transactions to debit cards as well as growing preference of debit cards for contactless payments, as the majority of debit cards in the country have contactless functionality.

On the other hand, Sharma said credit and charge cards posted a decline of 11.2% last year due to the lockdown and travel restrictions that affected consumer spending on airline tickets, hotels, restaurants and transportation.

Moving forward, he said the rise in contactless is a key factor supporting card payment growth in Malaysia.

Citing Bank Negara, Sharma said contactless card transactions accounted for 50% of all card payments in 2020, up 33% in 2019.

“The Malaysian payment card market registered sustained growth in the last few years.

“Although, the Covid-19 crisis has hampered the growth trajectory, improving payment infrastructure and rising demand for contactless and online payments will aid the payment cards’ market growth over the next few years,” he added.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 46
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights
   

Next In Business News

CPO futures likely to trade lower next week
China's industrial profits growth accelerates in Oct
New COVID variant Omicron triggers global alarm, market sell-off
Top US diplomat for Asia to visit Malaysia and three other ASEAN countries
Oil settles down US$10/bbl in largest daily drop since April 2020
Black Friday draws US shoppers but many shun stores for online
Stocks tumble on new coronavirus variant fear
China traders ramp up leverage in bet PBoC to stay on sidelines
Indonesia jobs law ruling may dim investment outlook
Investing in a tough 2022

Others Also Read


Vouchers