By Poovenraj Kanagaraj
“In Malaysia, about 60 percent of consumer spend using cash, even thought we have seen digital payments usage growing in strength,” says Visa Malaysia country manager, Ng Kong Boon.
While cash continues to have a dominance in transactions in the country, according to Visa’s Consumer Payment Attitudes Study research, Ng says he and his team are seeing an increase in consumers’ adoption and confidence of going cashless. The study conducted shows that over 50 percent of Malaysians believe the Malaysia will be a completely cashless nation within the next five years.
Ng points out that 38 percent of consumers are carrying less cash than they did two years ago as more merchants are accepting cashless payments as there are concerns of safety when carrying cash around.
However, Ng believes that there are huge opportunities for Visa to displace more cash in the country, be it expanding merchant acceptance so that they accept digital payments, or transforming user experiences through innovation and new partnerships so that more people would understand the benefits and convenience of making digital payments.
“Our role at Visa is to ensure that we are at the centre of every payment flow, be it using the Visa credentials as a card-on-file solution, or to use for topping up funds in a closed-loop wallet,” Ng says.
“We want to make the movement of money seamless and secure through our network of networks, he adds.
Factors influencing adoption of electronic payments
Visa Malaysia has also observed a shift in behavior where consumers are making digital payments for small ticket transactions, which were traditionally paid using cash in the past, indicating that contactless payment have become more widely used in the country.
“Electronic payments which include credit, debit and prepaid cards have become a part of the consumers’ everyday lives when they make a purchase online or shopping face-to-face such as pumping fuel, buy a meal at the quick service restaurant or groceries,” says Ng.
He further says that consumers look for a payment experience that is secure, seamless, convenient and hassle-free.
According to the Visa Consumer Payments Attitudes Survey 2019, 69 percent consumers prefer going to shops that accept cashless payment options instead of only cash, and over six in ten feel cashless payment methods are safer than using cash.
“We are seeing more new categories of digital payment acceptance, particularly contactless payments at laundromats and gas stations for instance,” Ng says.
He further adds that more and more small business retailers are also starting to have presence on e-commerce channels so more Malaysians can use their payment cards or devices to shop and pay and this will further lead to an increase in usage of digital payments in the country.
The shift towards e-commerce is one of the trends Visa Malaysia is foreseeing an uptick in.
“We are seeing good digital payments growth overall, both in transaction count and spend, E-commerce growth is also faster than face-to-face growth as people start getting more digitally savvy,” Ng tells Business Today.
Forging new partnerships
According to Visa Malaysia, one area they are actively working on is to forge new partnerships with fintech players that can transform the consumer payment experience.
“We will be announcing a few partners in Malaysia in the coming year, who will be joining our Fintech Fast Track programme,” says Ng.
The Visa Fintech Fast-Track Programme makes it to easier fintechs to partner with Visa and to access their global payments networks.
Visa Malaysia believes that through these partnerships, fintechs will have the potential to extend micro-financial services to the underserved segment.
“We believe that parterships can create new digital payment solutionas and tweak payment experiences to make more seamless for consumers,” says Ng.