THE new cashless habit has taken Malaysians by storm, according to the Visa Consumer Payment Attitudes report which found that digital solutions continue to redefine the way people shop and pay.
Across South-East Asia, a staggering 93% of consumers use a multitude of cashless payment methods including cards, contactless cards, and mobile contactless, mobile wallets, and QR code payments, with Malaysia taking a lead – second only to neighbouring Singapore – at 96%.
In the report, Visa group country manager for Singapore, Malaysia and Thailand Serene Gay said that the past year had been one of transition with economies building on the momentum created by the acceleration of digital payments usage during the pandemic as consumers and businesses are pulled into an increasingly hyper-digitalised world.
“With more ways to pay and more places for commerce to happen, the digital economy in South-East Asia is projected to hit US$1tril by 2030.
“Payments and commerce are being defined by convenient and intuitive experiences that blend across all aspects of life.
“Preference for cashless payments continues to grow, and nearly four in five (77%) of South-East Asian consumers plan to use cashless payments more often.
“This is driven by the widespread use of mobile wallets (52%) and contactless card payments (44%), as well as rising interest in the use of new methods such as ‘buy now, pay later (BNPL)’ solutions (63%),” she said.
Adopting a digital lifestyle
We have seen how the Covid-19 pandemic has changed the way we live, from shuttering of businesses to the boom in pandemic-driven eCommerce businesses – accelerating Malaysians’ expectations of becoming a cashless society by three years.
Opting for a cashless route, many view this as a safer way to pay (75%) with plans to use cashless payments more often (78%) as well as being ready to support any government initiatives for going cashless (73%).
What may have begun as a need for physical distancing and adherence to standard operating procedures have propelled Malaysians to lead an increasingly digital lifestyle, with 74% of Malaysians going cashless and taking an average of 12.9 days to successfully do so.
Now more than half of Malaysians use cash less frequently, with 59% carrying less cash in their wallets. The study found that Malaysians prefer digital payment methods such as using their card online (70%), contactless card (56%) and mobile contactless (40%).
Payments innovation in recent years has resulted in a wide variety of digital payment methods, making it easier to go contactless with myriad ways to pay. Malaysians prefer using both cards and mobile wallets (71%) as the more prevalent digital payment methods in South-East Asia show a slight preference for mobile wallets (58%) over cards (42%).
While both methods are considered fast and convenient, the preference for card payments is driven by wider acceptance by merchants (43%).
This change towards a digital lifestyle can be seen in how Malaysians choose to shop and fulfil their daily essential needs.
The study highlighted that nine in 10 Malaysians are still opting for home delivery services, with a third of consumers being first-time users during the pandemic.
Meanwhile, many have opted to go cashless to pay their bills (65%), fulfil their supermarket needs (58%) and use taxis or rideshare (55%).
Gay said that with ecommerce and omni-channel retail becoming more prevalent, consumers expect shopping touchpoints to be embedded in their everyday lives.
“Now, more than ever, is the time for businesses to re-examine operations and processes to go fully digital.
“As the trusted engine of commerce, Visa wants to use the diverse capabilities of our network to enable individuals, businesses and economies to thrive,” she said.
Businesses on the bandwagon
Malaysians are now eager to resume pre-pandemic activities. The study found that consumers postponed spending on international travel, domestic travel and out-of-home entertainment.
Malaysians remain hopeful for travel opportunities and are most eager to spend on domestic travel (26%), international travel (21%) and fine dining (10%).
A previous study by Visa – 2021 Consumer Payment Attitudes – also found that close to 90% of Malaysians are supportive of introducing contactless payments for public transportation to help promote electronic payments usage in the country.
More than half of Malaysians surveyed believe that public transportation payments will go fully cashless in the near future.
Visa, in partnership with Handal Indah Sdn Bhd which operates Causeway Link, will offer travellers and daily commuters between Malaysia and Singapore the opportunity to tap their Visa contactless cards to ride on Causeway Link buses.
Visa and Handal Indah recognise the importance of enabling consumers with a seamless and convenient payment experience when they take public transportation.
The first-of-its-kind open-loop contactless payment is accepted on more than 100 Causeway Link buses travelling across the border.
“This is the first initiative of its kind for Visa to transform the payment experience on public buses travelling across different countries and this is extremely timely given the reopening of borders between Singapore and Malaysia,” said Visa Malaysia country manager Ng Kong Boon.
“At Visa, we are working with our partners to increase contactless payments acceptance for different use cases, so that more people can benefit from this convenient, seamless, and secure payment solution.
“Contactless payment is gaining momentum in Malaysia. Today, Malaysia is one of the fastest growing countries in the Asia Pacific in terms of contactless penetration. Monthly contactless transactions have tripled in the last three years and contactless payments penetration is close to 70% now.
“In Singapore, nine in 10 Visa cardholders are using contactless payments, so we believe this solution will benefit consumers from both countries. Enabling open loop contactless acceptance for transit is one of the key steps to bring us closer to becoming a smart city,” he said.
In tandem with Causeway Link’s cashless payment initiative, the solution has been enabled for cross border bus services between Malaysia and Singapore, and at a later phase for local routes operated by Causeway Link within Johor Baru, including the myBAS SBST programme.
About 400 contactless payment terminals will be installed and all causeway link buses will eventually offer contactless acceptance.
“Our commuters already spend a lot of time on the road daily, and we want to make their life easier,” said Handal Indah Sdn Bhd director Lim Han Weng.
“Open payments and a more seamless experience are one of the initiatives that we have adopted for commuter convenience. Commuters on our buses will benefit from faster boarding time and easier transfer to other services.
“With our move towards contactless payments, we hope to introduce additional benefits in the future, such as a commuter loyalty programme with participating merchants that will enable the bundling of services.
“We hope with the introduction of more conveniences and benefits, more commuters will make public transport their travel mode of choice,” he said.
Since 2012, Causeway Link has had its own cashless payment system and the introduction of contactless acceptance is one of the initiatives that Handal Indah is undertaking to promote going cashless.
The open-loop contactless acceptance by Visa will be an additional payment option for Causeway Link commuters to pay their bus fare within Johor as well as for cross-border commuting.