The following commentary is contributed by Monash University Malaysia’s Associate Professor and Head of the Department of Finance at the School of Business Dr Karren Khaw
The rapid adoption of QR payments, particularly through Malaysia’s national QR standard, DuitNow QR, has transformed the country’s payment ecosystem.
Its growth has been driven by convenience, cost efficiency, and ease of use, resulting in widespread acceptance among merchants, including micro and small businesses.
Supporting the Tourism Sector
One of the most important contributions of QR payments to tourism is reducing payment friction for international visitors.
Through Malaysia’s growing cross-border payment linkages, tourists from participating countries can use their familiar banking or e-wallet applications to scan DuitNow QR codes at Malaysian merchants, reducing their dependence on cash, currency exchange and international card payments.
The convenience is particularly valuable for smaller, everyday tourist expenditures as they are not only spending at hotels, shopping malls and major attractions, they are also spending at restaurants, cafés, night markets, street-food stalls, souvenir shops and local tourism operators.
This means that QR payments can help broaden the distribution of tourism expenditure across the economy. A greater variety of local businesses can participate in tourist spending, including businesses that may previously have accepted only cash.
A convenient, internationally connected payment ecosystem contributes to a smoother visitor experience and enhances Malaysia’s attractiveness as a digitally connected tourism destination.
Empowering MSMEs
The impact on micro, small and medium enterprises (MSMEs) is particularly significant because QR payments have lowered the barriers to accepting digital payments.
Traditional card payment infrastructure can be relatively costly for MSMEs. In contrast, QR payments require minimal infrastructure and lower upfront costs. Merchants can accept payments using a printed DuitNow QR code or a standard smartphone app, without the need to invest in a conventional point-of-sale terminal, thus making digital payment acceptance accessible to hawkers, market traders, small retailers, cafés and other micro businesses.
Digital payments can also help build a credit footprint for financial inclusion. Unbanked or underbanked small business owners who previously relied heavily on cash can now build a verifiable digital transaction history through QR payments.
Financial institutions could also use these digital transaction records to assess MSMEs’ business activities, cash flows and creditworthiness, potentially improving their access to microloans and other forms of financing.
Therefore, QR adoption is not simply about replacing cash. It can become part of the broader digitalisation journey of MSMEs, helping them participate more fully in the formal digital economy.
Supporting Broader Economic Growth
Rather than driving GDP growth on their own, QR payments provide important digital infrastructure that connects MSMEs more effectively to the broader economy.
The impact can be significant, given the importance of MSMEs to Malaysia’s economy where they account for approximately 97% of business establishments and contribute around 39.7% of Malaysia’s GDP.
By connecting these businesses more effectively to domestic and cross-border spending, QR payments can help expand their customer reach, increase sales opportunities, and accelerate their digital transformation. These benefits can then flow through the broader economy by supporting business revenues, employment, household incomes, and ultimately, more inclusive economic growth.
Potential Risks
While QR payments offer significant benefits, their rapid expansion also introduces risks, particularly fraud and cybersecurity threats.
Fake QR codes, phishing and unauthorised transactions can undermine trust in the payment ecosystem, highlighting the need for proactive, real-time fraud detection and response systems. Data privacy and security are equally important as digital transactions generate increasing amounts of consumer and business data.
At the same time, digital exclusion remains a concern for those with limited access to technology or digital and financial literacy.
Ultimately, QR payments must not only be fast and convenient but also reliable, secure and inclusive to sustain public trust.
